You can't merge Apple IDs. You can change the email address the serves as the Apple ID. I've done it at least once, from an earthlink.net address to my current email address.
The screen shot you posted shows your Apple ID, the hotmail address, and then, under "Reachable at" two additional addresses associated with your Apple ID. In my account, I also see my mobile number. But, it indicates exactly what I said above, that you've had the same Apple ID and the the email address used as the user name has been changed. You can't delete the icloud.com address.
Apple didn't "merge" your @me.com with an icloud.com address. They changed it. Then you then changed the email address to a hotmail.com address
Even more in 2014 I made apple IDs for every device I owned, what a nightmare that was. I quickly learned this was definitely not the way to go.
Yes, that would have been a huge mistake.
There is no reason why we should not be allowed to control the data that is retained on our Apple ID. The only logical explanation is that Apple refuses to allow us to utilize the equipment and our personal data in the manor in which we choose to manage.
No, there isn't any reason. And, in fact, you can control what data is retained in your Apple ID. I find it easiest to manage by logging into icloud.com on a computer. You can go through the contacts that are saved to your Apple ID and prune them. Personally, I don't sync contacts to iCloud. I have them synced only to me email (which is not an icloud.com address). But, that's just my preference.
I understand that you're very frustrated. But, on reading all of your posts, it seems to be a question of learning how to use the tools Apple provides. I get that it can be very difficult to do that when you're already angry at the way things work.