I fly 99 percent low-power stuff, so don't really have experience at anything big. But I coat the inside of the BT with CA, or thin epoxy, or at least a good swab-down with thinned white glue, and I have not had any problems. Radiated motor heat is probably the real problem to watch here, as the ejection charge only flashes up to peak temperatures for an instant. You can relieve the heat build-up just a bit by using a solid centering ring at the front of the motor mount (for a gas seal) and using a highly perforated CR at the rear, or even just some balsa centering struts.
As far as recessing your entire motor so the nozzle is 1 & 1/2 inches inside the rear of the BT, you may be pushing your luck. Are you familiar with the Krushnik effect? Motor nozzles that are set too far inside a small chamber end up simply recirculating (swirling) the gasses inside the BT, pumping that circulation vigorously but losing a GREAT deal of net vehicle thrust. You may want to re-think locating those nozzles so far forward.
Taking a wild guess here, but maybe you are trying to use a cluster, you have a lot of motor weight in the tail, and you are trying to relieve the aft-c.g. problem by moving the motors forward a bit? If so, put the motors back where they belong and use nose ballast.