Going from EPUB to KEPUB requires conversion (I believe KEPUB has XHTML directly embedded into it, right?). It's Kobo's proprietary format to "support" fast scrolling with preview, reading time estimates, etc.

Yes, Kobo can potentially read EPUBs natively, however the support is intentionally gimped to try and push you towards KEPUB/their own store.

I think I assumed you have a Kindle. Sorry.