If you give in, lose your cool and do any sort of retaliation for his being an idiot, no matter what happens, he wins because you lost yourself and went again what you said was a moral code of yours. If you really want to show him what you can do, and get some frustration out, keep inviting him to your gym. Everytime he acts up, invite him out to the gym and handle it in a controlled environment. It could get your frustrations out, and it might make him a better person instead of a bitter person, which it might make him if you did it at home.
Besides, it sounds like you and your girl might be pretty serious (you talking about a possible future in-law). There's too much at risk to do it another way. She already told you she would get pissed, her parents wouldn't think to highly of you and it could mess a lot up. Invite him out to your gym with class. That's my opinion.