If you do want to get a tablet for reading, I highly suggest and iPad Mini. It's a really good size. There is also a blue light filter built into iOS. The only thing I do not reccomend is using iBooks (rubbish).
As for eInk, if the H2O's flashing is a bother, I cannot see any other eInk based device being any better as that's how eInk is. One good thing I like with my H2O is that I can turn the light down low and still be able to read. Have you tried reading using ePub (not kepub) to see if the flashing is any better? There is a patch for the current versions of the firmware to allow you to set the full screen flash to 99.
I do have a bedside led light that works very well for reading. It's from Ikea. It clips on the hearboard.
http://m.ikea.com/us/en/catalog/products/art/20315674/