Yes the cone has to compress as you say. The thread does go all the way
up.

Agree not a great design. You wouldn't believe what it cost! I think
the design is attributable to the 'back to wall' nature of the pan. The
back of the wc is not accessible once installed, so the design allows
removal/connection of the cistern to pan from the front/top without
pulling the wc away from the wall.

Not quite sure what 'tightly' means. It appears a close fit - but the
cone definitely feeds very easily over the bolt.

I could use a larger bolt - but am a bit wary of removing the captive
nut. It is actually not a nut but a piece of metal with appropriately
sized screw hole for bolt with metal wings underneath which stabilise
it within its hole. If I remove it and fail - I might be worse off.

I could use silicon exactly as you describe. I might try this next.

Not sure what gland packing means?