Whenever I try to insert a "read more" link on K2 items, it just bolds the content above the read more hr, and displays the rest of the content below it. Is this a sign I need to upgrade? I haven't tinkered with the php or css at all.

It's the css you need to alter in order to change the bold text for the introtext. Locate the div.itemIntroText in k2.css and remove the font-weight:bold;