Sorry, it can be confusing when talking about mesh size (finer, smaller, larger) and the number of elements (fewer, larger), and so on.
I was suggesting that you use a smaller mesh size on the bottom of the cylinder and the top of the plate. Those are the two surfaces that are in contact. A smaller mesh size will result in more elements on the contacting faces, and this gives a smoother result.
On the Mesh Settings dialog you included in your image, 10% indicates to make larger size elements, and therefore fewer element in the model. 1% indicates to make smaller elements which results in more elements in the model. The results are more accurate when you have smaller elements = larger number of elements in the model.
In your example, it may be easy and not change the time it takes to run the analysis by too much by decreasing the mesh size in the entire model. That is, move the slider down to 5% or 3%. In more complex models, you may not want to increase the number of elements in the entire model when you really only want smaller elements (= more elements) on the two contacting faces. Instead of using the slide to change the mesh size in the entire model, use "Manage > Local Mesh Control" and use a smaller mesh size on the two contact faces.
I hope this helps.
John Holtz, P.E. Global Product Support
Autodesk, Inc. If not provided, indicate the version of Inventor Nastran you are using.If the issue is related to a model, attach the model! See What files to provide when the model is needed.