The hole in the arm is worn, that is why the cotter pin will not engage the castle nut. You really do need to buy a new arm.
If they are no longer available, and/or you don't wish to fund a new or used arm, I'd put a flat washer under the nut so your cotter pin will work. I would also leave the cotter pin off for the first few days so that I could retighten the nut on a daily basis. I can pretty much guarantee you that if you don't, you'll have the EXACT same problem as you did before in no time. Even my plan is not a sure bet; you really need to replace that arm.
If you have the time, pop the one off the other side and compare the hole diameters with a calipers. I think you'll be surprised.