[BionicGecko]

Indeed you do need to use "send-to-kindle" in order for syncing to work. Unfortunately books not purchased on Amazon and sent OTA like this will always be listed as "documents", there is no way around that. It's actually called the "Personal Document Service".

As for covers, it depends on how you convert your books. If in Calibre you choose "Both" as MOBI File Type, then your Kindle will actually receive an AZW3 file when you download it (unless it's a very old model). If you choose "Old", then you'll get an actual MOBI file. Covers do work on MOBI files, but not on AZW3. On the other hand, AZW3 supports better formatting options.

Regarding your question, syncing the last page read has always been a bit hit-and-miss for me, regardless of the file type. Sorry I can't be of much help here, but I'm definitely listening if someone knows a way to make it more reliable!