Welcome to MR, esjones, and congratulations on your new Reader. Below is the link to a Sony Reader Troubleshooting Guide that is being put together by MR members.
https://wiki.mobileread.com/wiki/Sony_Reader_Troubleshooting_Guide
I believe what the Sony rep was trying to explain was that when loading
Library books to the Reader you can only have one format. Only have the pdf or only have the epub versions of
Library books on the Reader at one time.
The Sony Reader can have a mix of formats on it at the same time. The only time this is different is with Library books.
A quick question.... you said that epub would not open...
Do you have Adobe Digital Editions (ADE) installed and your Reader authorized?