Hi there Judy,
I also had a similar problem but in my case it was two outlook accounts, one of which was opened in 2011 and then never used and totally forgotten. A more recent account is the one I want to use but whenever I sign in I am taken to the old account. Like you, attempts to delete this old account have been unsuccessful.
In desperation I contacted Microsoft and had several "conversations" with various agents via their internal email system, known as Chat. All of them assured me that there was an easy way to sort this out and we tried three or four different ways but, no, I still got the old account on sign in. I eventually gave up and moved my email account to Gmail.
I realise that this is not very encouraging for you but I think Ian's suggestion of contacting MS Support is probably the best. Maybe a new look at this might be the answer.
As to blocking the forwarded emails from your old Hotmail account have you tried (you probably have) going to Settings in the Outlook account then Options then Junk Email then Blocked Senders and entering the email address of your old Hotmail account. Not sure if this will get over the fact that the Hotmail account is "yours" but maybe worth a try.
If you do find a solution to this please be certain to post on this thread because I will be very keen to know the answer.
Best of luck,
Niv