Al wrote:

Is there a way to make each hotmail account folder group the default
location for the respective hotmail account so I can delete the
redundant (and confusing) third group of folders?

Nope. Outlook requires one set of default folders to act as the delivery
location and Hotmail folders can never be the default unless you're using
Outlook Live and Hotmail Premium.

Or is there a way,
when I delete messages from one of the hotmail account folders, to
trigger the deletion of those same messages in the corresponding
folder in the 'mail delivery' group?

I just tested this and deleting from a Hotmail folder places the deleted
item in Hotmail's Deleted Items folder and not in the Outlook default
folder. Sending, however, is another matter. Outlook will always use the
delivery location Outbox when sending messages and once sent, your message
will be moved to the delivery location's Sent Items folder. That will never
by Hotmail's Sent Items folder unless you create a rule to move outgoing
messages to that folder.

A related question: if I set a very short 'life' to messages in the
sent and delete folders in the "mail delivery location" group, will
that in any way impact the duplicate version of those messages held
in the corresponding folder under the hotmail account?

I can't reproduce what you see. It doesn't work that way as far as I can
tell.
--
Brian Tillman