I may be off the mark in terms of ceder as the traditional material, however it is mostly what I used to see when I lived in Oklahoma. As well the pine you find now adays is much softer than the old growth your original shutters and storm windows were made from.
As jeepnstein pointed out, ceder is usually on par or only slightly more expensive as pine. I can typically get cedar from most mills for 1.25 to 2 bucks a board foot. Though I typically use ceder that I have harvested and milled myself.
As for the tools, you do not need a fancy shop full of expensive power tools (though it certainly makes it faster). A lot of the work I do is also with hand tools. A mortise and tenon can be cut by hand with a chisel and a hand saw. While it may take a bit longer than a few passes over the saw or router, it is very rewarding to craft it completely by hand in a traditional manner.
And I agree that while there is a better way, but as with everything I build I like to do it once, and do it the best I can. But yeah. when the cold windows blow I usually reach for the shrink film to go over the windows
As per sundine2's request. The first two pictures are of a bridle joint. Which can easily be cut on the table saw or router. The last picture is an illustration of a pinned mortise and tenon joint, thought in a M&T joint the pins are optional.
Lastly, HowlingOtter is the name of my wood studio. check me out at howlingotter.com Keep in mind it's still in the works and has been getting coded in my partners spare time between paying projects.