Steering shaft issue

[totta Crolla]

Your picture is of a complete security screw, it's purpose is to make removing the steering lock a difficult task for car thieves. You can just use a normal bolt to replace it. You are correct about tightening until the head breaks off, I remember now that mine were 'head less'
The purpose of the nylon bushing is to allow the shaft to slide inside the tube in the event of an impact, the bushing along with the indents (peenings) creates enough resistance to allow the column to work as one. You could just make them a solid connection by bolting the two together but be warned about the non collapsing steering column issue.