Can I use a USB hub so that I can add more than two external hard drives?
Yes but there are restrictions. Linksys v2.3R63 and above allows multiple FAT32/NTFS drives attached to port 1 using a USB hub. You are only allowed 1 Ext2/3 drive per port however. A new Unslung with the ufsd package added also supports this feature. OpenSlug supports multiple FAT32 and Ext2/3 drives natively.
See also USBHubs