I'd also report the sender IP/email address to SpamCop.

Partial Answer

You can transfer all your mails to gmail and manage your inbox from there. You will have to sacrifice Hotmail for this and use Gmail, if you already have a Gmail account then its good.

Hotmail doesn't have as much setting and customization options as Gmail provides (IMHO), though I haven't use Hotmail so much, so I can't tell more about it.

Section #1 (Shifting to Gmail)

Don't worry, you won't loose any mails from your hotmail account.

Step #1

Sign in to your gmail account, If you don't have then create.

Step #2

After you are signed in:

• Go to your settings (make sure that you are using standard mode, not basic html).
• Move to Accounts and Import tab.
• Go to the section which says Check mail from other accounts (using POP3)
• Click on Add a POP3 mail account you own

    ^{Drag and drop image in another tab to see clearly}

Step #3

• You will be asked about your email id.

• In next screen, do as directed, but also select the check boxes about SSL and labeling.

• Click on add account. You will be asked some more questions, respond to them as your will. (they are helpful)

Section #2 (Teaching your friends lesson)

Setting up the filter

Step #1

• Go to Filters tab of Settings. Now you should see Create a new filter at the bottom of the screen.
• As you said, there is a Send-to filter.
• Play with setting to get more out of Gmail..