I've used a 32gb flash drive in my Sonic without an issue. It was formatted as FAT32. The 2500 limit of song titles definitely is there. You will hit the song title limit long before you run out of physical space on a 32gb flash drive. If you want to carry around more than 2500 songs, you'll need multiple flash drives, and as cheap as they have become, that isn't a expensive proposition. I bought several 8gb and 16gb flash drives for use in the vehicle.
Like mentioned by another member, be sure you click on 'safely remove hardware and eject media' instead of just yanking out the USB drive when done dragging and dropping while connected to your PC. Most times, you won't have any problems, but every now and then Windows will not finish closing the session until you do so.