Yup - we want the servo arm to always rotate when you turn the ball-driver (otherwise you could be in a real mess if the screw keeps on turning and you suddenly have no way of getting the hatch off!!), so the cap-screw is simply glued to the arm to ensure that the arm will rotate on demand. If I recall correctly I actually glued a small nut on to the bottom of the servo arm too, I used Pic Plasti-stic to wick into the joint, then used Aeropoxy to make a fillet to hold everything tight.

The plywood plate is just there to hold the servo arm in the right position for you, so you want a tight clearance fit drilled through, then a washer & nylock washer on the other end that is tightened up enough to ensure that the assembly won't slop around, but loose enough to allow the screw to rotate when required.