AFAIK Kobo does hyphenation just fine, and it's possible to use other hyphenation dictionaries than the default one. Personally I can't stand hyphenation, so I disable it in the book css.
I haven't noticed any difference in letter spacing between the kepub renderer and RMSDK, unless it's specified in the css - the kepub renderer handles it badly if that's the case. Otherwise the fonts and spacing look the same.
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