I do have the newest system update installed, it had auto-installed when the system was on standby.
I did a reset per your instructions.
I am still having freezing issues when playing Ballpoint Universe and a mini-game on Paper Monsters. However, I played 5 of the older e-shop games I have downloaded onto my hard drive. I played each for about half an hour, and had no freezing issues at all.
This is very strange indeed. It only happens with that one level on Paper Monsters, and usually after or during a large battle with many sprites, images, etc. on screen. Otherwise, I was able to play Paper Monsters with no freezing throughout the whole game.
I'm not sure what exactly I should do from here, if it is a system issue or just bugs with those games.