I find it funny that he is even reacting to that daughter's friend,
first thing to do in such a situation, (when someone is trying to get you in a relation, a relation that might be considered inappropriate)
is to laugh it off at their first confession/suggestion, yes it would be hurtful to that person, but it would atleast put some sense in their head, that you 2 are in effectively different worlds, and you dont see them as a potential partner
last thing you want is to be conscious of that person