Should head stay level or inclined in a bank?
I am not a glider pilot, but the principle holds for flying any fixed wing aircraft1: you should keep your head level with the aircraft, as you described, not the horizon.

As your instructor explained, there may come—or will come—a time when you are not able to keep your head level with the horizon due to the nature of a particular maneuver or orientation, and that is a practical matter to consider. It is certainly difficult to incline one's head 60° to the side in a steep turn. 

From my perspective, however, the more important reason is that your frame of reference needs to be the aircraft. You are used to viewing the world with the ground as your frame of reference; down is down, up is up. As you learn to fly, however, you need to learn a new way to view three dimensional space, or—more specifically—the way you move through that space in the aircraft. It might sound cheesy, but you really need to learn to become one with the aircraft and hold the same perspective regardless of the aircraft's orientation.

Now, that being said, as you gain experience and develop your skills, you may come to realize that this perspective shift does not always require that your head remain rigidly perpendicular to your shoulders. Rather, it is a matter of perception which will eventually be independent of how your head is oriented relative to the aircraft. At my first flying job I spent much of my time in maneuvering flight and my head was rarely still—much less level with the aircraft. I spent a great deal of time with my head on a swivel, looking up and down, side to side, craning forward to clear into a turn, looking back into the cockpit, etc.

At this stage in your training, however, it is probably important to train to keep your head straight within the aircraft; certainly follow your instructor's instructions, and you should do well.

1This probably holds true for rotorcraft as well, or any aircraft for that matter. I am only sharing what I am familiar with.