I'm wanting to add either a sperator for each article below the read more.  Or move the read more to the end of the article as if its part of the next sentance in the article.  Right now, it looks as if the readmore is part of the article below it.

Use firebug to examine the code.
Create a k2 template and move the "read more" link where you want it in category_item.php or category.php (it should be in one of those two files.