(I noticed a typo in that quote, it should read "And if someone wrongs you more than once." Sorry =x) Like I often say, people that break one rule are likely to break a second (and third) rule. And it's not that I'm giving them breaks by compounding the offenses. So like you've pointed out, if within one report they are guilty of killstealing AND looting, I'll mute them once. But get this, next time it's an auto strike two, for either of crimes. In the long run, it'll hurt them to have less strikes than to have more mute time.
Regardless of time frame:
Player A loots. Strike 1 for looting. Muted 6 hours.
Player A KS'es. Strike 1 for KS'ing. Muted 6 hours.
Player A loots again. Strike 2 for looting. Muted 12 hours.
Player A loots yet again. Strike 3 for looting. Muted 24 hours.
Player A doesn't learn his lesson and loots. Strike 4 for looting. Muted 48 hours.
Player A figures he'll keep breaking the rules, but will settle for a lesser punishment and KS'es. Strike 2 for KS'ing. Muted 12 hours.
By now I'm swirly eyed. And this guy should have been gone 2 mutes ago. But if I compound the KS and looting, maybe the guy won't get as much mute time, but now they'll be down strikes. Though if I punish separately but count them towards strikes anyway, then it's an unfair double whammy. This is the happy medium that I'm working with, since the current rules aren't specific on that. But if multiple reports within the same general time frame, regardless of either KS and/or looting, from different people against the same rule-breaker appear, then I can count them. And if it's at least 3, then punishment gets adjusted. So by all means, if your friends were individually wronged by the same person on the same day, get those reports in ASAP.
The guy you reported got punished, and I think that should be enough. Moreso other people, get rather uppity when their cases aren't closed with a ruling in their favor or with the highest possible punishment. They've been caught, and furthermore, their names are now public. Not only does this send an alert to other players, but the staff can also remember and tell if behavior is coming from the same account/player under different character names.
I think that answered your questions. Oh, as for the looting versus greeding, you're implying that it's not that harmful that classes other than smiths loot you. You're then inviting those classes to take loot that doesn't belong to them. Rules specify what looting is, and that using the Greed skill also counts.