How do I fix metal clad wood casement windows that won't close?
As mentioned by fixer1234, the problem is 80 years of paint build up. The interlocking style of weather stripping you have there works with very close tolerances. When the weatherstripping gets painted it takes away already tight tolerances. It looks like in the first photo of the window open there is "bridging" where the paint has either spanned the gap or filled in the gap needed for the other part of the weatherstripping on the jamb to nest into. 

The metal needs to be cleaned of all paint. The metal will not rust so scrape away, but you MUST be careful not to distort the metal in any way. I cannot tell if it is in other places, it does not take much to give you trouble. 

Back in the day this was the best out there and when it is kept in good shape, the window works flawlessly for opening and closing. Keeping it in good shape requires that no paint get on it, and no trash/debris gets in the spaces left by the metal for its' counterpart to fit into.

Looking closer at the open window picture there is a large buildup of paint on the leading edge of the metal that changes the size of the metal so it affects how the metal on the window engages the metal on the jamb. You may notice a slight improvement if that is cleaned off. 

One of the tools I use to clean this type of trouble off of old school weatherstripping is my trusty sanding block, made from the belt of a belt sander pulled over a block of wood, cut so-so that it literally has to be stretched onto the block of wood. That tool will remove the paint and grind things flat. If you use the idea I suggest either 50 or 60 grit sanding belt to do the task. Any finer grit will readily clog. A paint scraper will come in handy too. 

If you stripped the paint off to bare wood on the sill, head and the sides where the window swings out of, and prime and repaint, you may find you widows may have not swelled so much after all. I would need close ups of the corners of the windows to better say, but from what I see, there is no major swelling going on, although the wood does move seasonally due to humidity changes during winter/summer.