Alright, I tried making the projectile a capsule, and it WORKED!!!
I reset Jolt’s position steps back to 2 as well.
Thanks for the suggestion guys. 
Addendum
I wanted to add some more observations I’ve had as I ran more live tests.
So, I decided that Monkanics’ maximum projectile speed game design-wise is 1,000 m/s.
To support collisions with this projectile speed, I increased the length of the collision shape:
It’s CRAZY long now. But I soon noticed that, while playing the game, it barely matters. The player won’t notice it in the slightest. Especially if the mesh instance is smaller in size (and combined with some VFX as well).
I also noticed, the faster the projectile speed, the bigger/longer the collision shape needs to be to detect collisions.
This is because on every physics step, the projectile moves a set amount, then the area attempts to detect bodies. However, the body can teleport right past a body because it moved too much in a physics tick.
This is why longer/larger collision shapes work, because it covers more ground per physics tick, giving enough room for error.
That’s all I wanted to say. I had to get it out somewhere, because it really got my game designer gears turning.
I think this is an example of abstraction for the player. Something that makes that game feel/run better, but the player isn’t aware of it. Kinda like a coyote time mechanic for jumping or input buffer.