If that's the case, harden the shaft as well.
Granted that would be a fair bit harder to do because of the threads on the shaft, it is possible via Selective Case Hardening. You can do this either by plating the threads with copper before you perform the case-hardening process. Or the other option would be to use laser hardening or some other highly localized heat source.
Granted these processes are either time consuming or expensive, so you would really just be better off making your own shaft.
But, that 1" of steel should be more than sufficient, as the motor was biting into torque arm a fair amount it would be worth hardening the surfaces of the torque arm. It would increase the lifespan of the torque arm, and so long as you don't exceed the hardness of the shaft you wont endanger the shaft when you harden it.
But your correct a tensioning bolt would go a long way to spreading out the force on the torque arm.
So if you both hardened (or selected a slightly harder material) and added a tentioning bolt, that would create about the most sturdy torque arm you are feasibly going to get.
If your motor still destroys that it might be worth considering upgrading the bicycle