I don't use the Hotmail app. I don't see any need for it. I just set up a Hotmail account on Android using the method described
here. However, just in case it helps...
if I go to my Hotmail inbox in my stock Android Email app, hit the "settings" button, and select "Account settings", there is menu option called "Amount to synchronize". If I select that option, it gives me the following choices for the amount to synchronize, 1-day, 3-days, 1-week, 2 weeks, 1-month. One month is the longest timeframe available, so it's probably a Hotmail (Hotmail/Exchange-Server) or Hotmail-Android-interaction limitation, and not necessarily a limitation of the Hotmail app you're using.
It may be worth noting that if I access my IMAP email through the same stock Android Email app, there is no corresponding "Amount to synchronize" menu option. When I scroll down to the bottom of my IMAP inbox, it says, "Load more messages". If I tap that on "Load more messages", it will load older messages. If you scroll to the bottom of those older messages, it gives me the same option, and I can keep repeating that over and over. On the other hand, my Hotmail inbox seems deeper initially, but when you get to the bottom of the inbox, there is no message that says, "Load older messages", and apparently no way to load older messages through the settings button or anything.
So it seems like a limitation of Hotmail or the way that Hotmail/Exchange-Servers interact with Android. Not sure.