Could just use a foam end of sort from a craft store... may have to weight it inside to make sure it's even... or it won't go straight.
Also, for the tube of the rocket, could you not just have some sort of cardboard tube filled with foam(etc) that would be able to have the cartrige be pressed in by pure pressure from the blast, making the rocket it more easily reusable? Instead of having to ducktape.
As for the nail... I think a more precise tool could be used, but whatever.
What I would do for that is sand it down, to make sure it is smooth. Just to help it go in easier. As for the end cap, maybe a thicker one, and use a drill, level, and ruler to make sure it goes straight?