You don't say which version you are playing, as things are *slightly* different between them- I'll get to that in a bit.
I continuously receive updates from other races buildong those "wonders of the universe" improvements
You are not the only person that is annoyed by this. Personally, I don't mind, since every civ likes to crow about it's achievements, and putting out a galactic press release makes perfect sense to me.
Regarding your UP question, throughout history, groups have gotten together and dictated to others what they may or may not do. This is reflected in the game. It may not seem fair to one or more of the other civs, but it is what it is.
Does the AI's diplomatic decisions depend siolely on the Relation Factors or are there additional factors as well.
These are the primary factors. The AI has gotten pretty savvy, and sometimes makes decisions that to me are 'beyond the ken'.
For example, does a civ want two other more powerful civs to be at war to decreased their relative military power and will therefore try to instigate a war between them.
Absolutely. The Drath are notorious for this. Their "Super Manipulator" skill is geared entirely towards this. The Drath will pick out the civs that they perceive to be the biggest threats, and set them against each other. They have a skill called "War Profiteering", and can make a pile of money by keeping the galaxy at war.
does a civ pick and choose friend and foe based on what will benefits him most?
Yes. Remember though, per your example, if you are allied or teamed with Civ A, it will not attack you. This is also true if you have a treaty with it. You can break a treaty and declare war on Civ A, but it will not. This is assuming that the player is Civ C. I don't think that the AI is quite as deep when dealing amongst itself.
Every race has the ultimate goal of killing everyone else in order to win the game.
Not exactly true. The AI is programmed to win the game, in any way possible. If it can research a win, it will. If it can ascend, it will. If it can win by influence or diplomacy it will- although those last two are often just byproducts of going for a military victory.
I hope that this has been of some small help. Good luck, and if you have any further questions, don't hesitate to ask.