When I changed my draglink, I had a piece of special 3/4" round stock threaded for modern tie-rod ends. Not the taper shank ends, the older ones with a straight shank that are direct replacement for the ball and socket ends.
http://www.classicparts.com/1947-59-Tie-Rod-Ends-1_2-Ton-pair/productinfo/76-005/Filling Station, 1947 truck tie rod end,
http://www.parts123.com/parts123/yb.dll?parta~dyndetail~Z5Z5Z50000014a~Z5Z5Z59971~P65.00~~~~S35D0NYB4Z69152318436b~Z5Z5Z5~Z5Z5Z50000014x
I still had to cut off some of the threads so it would clear the axle. I have about 3/16" clearance and so far, all the paint is still in place on the axle so I guess there is enough clearance.
I would thin down the nut, not the arm if you really need more room. And you might look into changing out that joint to the type I linked if you haven't tapered your arm yet. This type has a shoulder and straight shank so you can washer up the top side with a grade 8 washer to gain more room on the bottom side.
Joe