I've used hardened inserts in things with success also. But you still have to drill out the hole for the insert for a plug sized hole, and it would require you to drill it out quite a bit larger than you might have room for, I can't say without seeing the head, but unless there's a lot of material around the plug hole, I would suspect the Aluminum's holding power would be compromised and it could pop right out under compression. I'm just pointing out things that are possibilities.
Also, I'd be afraid of the drill being "pulled" into the hole. Even going up one size at a time there will be a chance that it will want to pull that bit in, even if it is lined up perfectly. Drill rpm and feed rate can quickly cause things to get out of hand.
Considering rarity and value, If you have a drill press and can fixture the head in the exact position to make the hole and the drill centerlines line up perfectly, I would be hesitant to do it, unless you have a hard stop on it, can control the depth of cut, and peck away at it, about .010" per peck.
A carbon EDM (electrical discharge machining) is the perfect machine for this. I used to run one and I've done hundreds of holes (not spark plug). What you use is a piece of carbon with the number of threads per inch that match the thread pitch of the hole. The diameter is smaller than the size of the plug, and it goes down in the hole, the computer locates the center, and orbits around it until it's the proper diameter. The carbon along with electricity burns away the material that you want out of the hole.
I'd at least ask around if any shops would be able to do it reasonably. I can't speak to the lazer pooch mentioned.