Personally, I use a riven octagonal peg tapered only on the last 1" or 1 1/2". I do soak them in a bucket of linseed oil and find that it makes driving them much easier. Personally, I don't see an issue with a small amount of crushing on the relish side of a draw-bored hole. I think it's unavoidable with an offset hole.

I think that the point with the peg not filling the entire hole is that it makes it a bit of an engineering unknown. Which is really not a major problem for many projects, but can be problematic if dealing with trusses or heavily loaded beams in tension.