>1. There is only a hotmail account in my Outlook 2002. Can I send email out via Outlook automation with this hotmail account?

Sending an email by using Outlook automation as no relation to the type of backend. So, you just do a regular Outlook automation and you'll be able to send your email.

Or, if you wish to record it in Hotmail as if you would have sent it from there, then you may issue IE automation for that as this is a Web interface.