I always had a problem with Kira beating the hell out of any male she fought with. Damar's not the only one. She kicked some Klingon arse, too. Not realistic, if you ask me. Once, if she's lucky, but every guy in her way?
As for hating her... If she could work with him after he killed Ziyal, he could work with her after she did nothing but being a Bajoran. There were bigger matters at stake and they couldn't let personal animosities ruin their cooperation. Maybe you're right with Damar admitting to the hatred, but he also became a politician and they are diplomatic. Being honest would serve no one but it could encourage Rusot in his hatred. He was trouble enough without that.