I do not think that this feature exists, and the hack you suggested seems to be the best way. However, this seems like a good feature to put into the core code whereby users do only see courses for their language if the course has a specific language set - try adding it as a suggested enhancement on Moodle Tracker - http://tracker.moodle.org/secure/Dashboard.jspa.
With the hack, I do not know how you could update the course settings page content, something to ask in the development forum.
I hope this helps, regards,
Courses and course formats
Courses in various languages
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