I have a working N905 Touch, and it has a lot of trouble connecting to my WiFi network. Somewhere along the way I asked Kobo about this, and it basically comes down to an older device, changing networking protocols and issues keeping the WiFi support in the software they use. The device works, but, it usually takes two or three tries to connect and sync.
But, you will also hit another issue. And might already have hit it. The factory reset put the device back to a 1.9.x firmware version. This does not have support for the current networking security protocols. The older protocols were removed from the Kobo servers early last year as they are no longer considered to be secure. The Kobo desktop application still supports the Touch, so you can use that do the setup. Or, you can manually install an update and then do the setup. If you do this, you should use at least a 3.19.x firmware version.
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