The nut seen in the picture is the pinion nut and is actually the INPUT to the differential.
It's also not as easy as just tightening it down - that nut, along with the crush tube inside the differential sets the pinion preload, and those two together with some shims set the pinion position which is critical to the life of the differential - it's also normally staked to prevent it from coming loose.
You possibly have a collapsed bearing in the differential - especially it it still "wiggles".