What is the proper method to install a "close" metal pipe nipple?
Installing the close nipple is done by starting the nipple into the first fitting by hand. Then start the second fitting. Make sure that the suitable teflon pipe thread tape is installed on both ends of the close nipple. Then use an appropriate wrench on the second fitting to tighten the joints. 

Note that the threads on a nipple like this should have a diameter taper on each end. This causes the fitting to get progressively tighter as each end is screwed into its mating part. When tightening the two joints simultaneously the two tapered joints will turn till one gets tighter than the other. At that point the looser one will then tighten up till it catches up and becomes similar tight to the other joint. Eventually you will achieve the necessary thread engagement with  each end of the nipple.