Cast iron was increasingly trialled (and deployed - c.f. shell fuzes) as expertise grew in producing parts previously made in brass. The comment in the letter affirms the machinable qualities of brass, as used in other grenade components such as centre pieces and filler screws... and base plugs. Interestingly in 1917, the economy of materials program resulted in cast iron centre pieces ordered for trial, although the difficulty of manufacture suggests the use of CI was shelved for such intricate parts.
Dobson & Barlow are the only manufacturer, of which I'm aware, that used the embossed markings - seems to have been a trade feature of the company. I've seen several such examples of D&B 23II plugs - see attached image. Don't recollect if I've seen a D&B 23III.
I can't tell what material your plug is made of, but I doubt if it is anything other than a grey or spheroidal graphite cast iron. I think it has just been fortunate in that it's been hidden away and not subject to maltreatment over the years.
As I noted at the end of Post #15, "other contractors produced the Hearn design plug..." although B&G also produced quantities for other companies.