I contacted Kobo about the thin space issue (only some of their built-in fonts contain this character). They talked to their engineers, and for some reason, space characters aren't handled the same way as regular characters with regard to supplemental fonts. Which is totally lame.
As a workaround, consider using
Nico's modified fonts for ereading (free). His 4.0 release
incorporates the special space characters that are causing us issues, and he has a specific version of his fonts tweaked for Kobo/kepub rendering.