That's news to me. I don't see why Netflix would care where the residential customer is located. They can geolocate IP address regardless of the peering point to block international traffic as needed. I'm certainly transporting traffic a lot farther than across IL to get to peering points in Chicago, Atlanta or Dallas. If you check peeringdb.com, Netflix doesn't have a peering point closer to Southern IL that Chicago anyway. They don't look to be in St Louis or Davenport.
There are two main answers to the second question.
Cable ISPs are originally video providers, so they have a financial incentive to impair an online video service. FTTH services are also big into Triple Play so that's why Verizon and AT&T are being jerks. If you look at traditional DSL companies like Frontier, Windstream or Centurylink they are not rattling their sabers about how Netflix is 'using' their network. These companies only sell video by bundling Satellite with their service, and they only do that to compete with Cable on Triple Play. God knows they are having trouble in the copper last mile, but they're at least trying to do the right thing by their customers on the peering side.
Also, online video is the largest source of bandwidth usage, and Netflix is the largest source of online video. Impairing that traffic, causing your customers to drop down from HD to SD resolutions, reduces your network load and lets you slow down upgrades elsewhere on the network. Choke at the peering point where network is cheap, save money in the regional transport where it is expensive. It doesn't even require special traffic shaping routers. You know everything on those peering links is video, just stop upgrading them.
Hulu is a lobotomized alternative pushed by the television networks. They dont have enough money to squeeze or enough traffic to be a problem.
Amazon and Google generate tons of business traffic as well through cloud services and of course the search engine so impairing those ASes would piss off the most valuable customers the ISP has.
So that's why Netflix is singled out. Hulu and Vimeo and so forth are small potatoes, Amazon and Google are not to be #$%&ed with.