Yep, simply blacklist him and move on. Given I've had friends who have been permanently banned for their actions building up over time, I can tell you now the report function DOES serve its purpose. A simple name calling, though frustrating (and I've got friends who are sensitive to it who I then cheer up afterwards and be there for, because that's what friends are for), is not a ban-worthy offence. Now, showing off his parses to belittle you should warrant further punishment, and something that should have been considered in the report. And, here's the thing, you rudely telling him to get lost (as in swearing) will most likely have weakened the strength of your report, as Square Enix will have looked into that and saw you weren't perfectly innocent either (two wrongs don't make a right and all that).

Basically, best thing to do is have a rant with friends about it in private, and just let them cheer you up over it.