If you call autometer, they will probably send you a new gauge with no hassle. They have been known to be good about this kind of thing as long as you aren't a jerk on the phone.
That nut on the back holds the fitting to the gauge housing, it's not some magical nut that recalibrates space and time. They probably don't want people to mess with it cause there is no reason to unless you're taking the gauge apart, which voids the warranty. It doesn't need to be very tight, just a little more than finger tight. That's just the way they are, it won't come loose.
The usual reason for a gauge to read drastically wrong is because it was dropped HARD. I've seen parts like that used to play hockey (as the puck) in a parts chain store I used to work in. Next time mail order it from a reputable place and don't buy some teenage counter jockey's makeshift sports equipment.