ORIGINAL: expo
Both the set screw and insert are steel. Mentioning that they are dissimilar metals wouldn't matter since glow plugs and head bolts are steel also and are screwed into the aluminum head.
There is a big difference though. The steel glow plug doesn't seal against the threads in the head, but with the copper washer. If the plug expands at a different rate than the head, the linear expansion isnt much, so the gasket takes up the difference. The head bolts are slightly stretched when tightened, so the difference is accomindated with the elasticity of the bolts.
You mentioned that the NPT adaptor had a flange on top. Have you tried a copper washer under it? That probably is all you need.
Don