Wow, thank you, this is very helpful ! Where is that hosts file ? Are you talking about .kobo/Kobo/Analytics.conf ?
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Basically, I would agree with @Quoth. The email address I set up for my Kobo registration has only received emails from Kobo so I would agree that they are not selling the information. I do obtain quite a few books from Kobo so I get emails from them about specials and recommendations.
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And only got even those because you used the Kobo Website to buy stuff.
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Not getting marketing email from third parties is definitely not a proof your data is not being shared.
Kobo's
privacy policy clearly state they do share data to vague third parties for advertising and marketing purpose, as usual with most enterprises nowadays. This is a proof your data is being shared.
Well since I already modified the database, is it still safe to flash the device ?