I could be wrong on this so please no flame, I have a physics background I am not a ME.
As I understand it when you properly torque a nut, you are in fact, properly stretching the steel bolt the nut is attached to.
It is the steel bolt's attempt to return to normal, or spring tension that applies the clamping force desired. In this application the clamping force presses the base of the nut against the frame which presses the frame against the case.
Two things about the Nichol's TI bolt
thing 1: It is TI so it doesn't stretch like steel so maybe it uses the extra thread length to spread out the force because it is using the thread friction to supply the clamping force... or
thing 2: from what I read on the Nichols site the TI bolt is very stiff compared to the steel bolt it replaces. This property allows less movement (frame relative to case) which is where the improved feel comes from
Finally the bigger nut could just be there to reduce stress on the steel tools normally used to torque the nut so you don't round out the inside of the socket you are using to tighten it down
just my .02 and I'll add like everyone else who has been reading this thread -- fanfukintastic
work
This thread and Truckers Monster rebuild are the two best on the forum