Hi!
As far as I know, hiding contacts in the contact list is not possible. It sounds more like a suggestion for the MSN Messenger team.
(but I could be wrong)
And for point 2, in any conversation window, you can type:
/blockgrp name of group to block an entire group of contacts.
/unblockgrp name of group to unblock the group.
Additional commands and some MsgPlus! tutorials.