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You are correct that the T1 will not borrow directly - this happened after a major Overdrive "upgrade" in 2017. The last time I tried it I could access the library, browse and borrow but when I tried to actually download a book I got an error message.
Returning books on the the T3 (and on the T1 when it used to work) is as you described - go to the Bookshelves page and long press. I expect the T2 can also return multiple books in the same method as the T3 - from the Bookshelves page, press the menu button (the physical button), then choose Return Books, then you will get checkboxes to select the books you want to return.
I usually prefer to browse the Overdrive library on my home computer and then sync to my T3 because browsing on the T3 itself is so slow.
If I am away from home and have wifi access I will first use my smartphone to browse and borrow a book. Once the book is in my Loans I then turn on the T3 wifi and download the book. I have my Loans page set as my home page on the T3's browser to save time.
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