can I use a two gang old work electrical box instead?

The switch plate screws typically go into the switch yoke itself. If they bottom out before the plate is flush it's because the switch is standing too proud of the finished surface.

Even if the fill is within allowances, you can still run into problems with dimmers.

You might try moving the wire nuts to the other side so they are not behind the dimmer.

here is my dilemna.

The left side of that wall plate is only being used. The right side is just a plastic dud switch.
In other words the right side of that wall plate doesn't connect to a light switch. This poses a problem because the screw cannot go in tight on the right side. How can I modify it?

That's great Ron - took the words right out of my mouth! This looks like some sort of Jeff Foxworthy setup for a joke! Masking tape on the top right, dry wall screw holding in a piece of broken plastic on the left, and a little duct-tape in the middle! Oh, I almost forgot, the wood shims crunching in the left side of the box.

Yes, an old-work box may help correct this, but please get someone who has a clue!

The nylon is more flexible than the typical rigid plastic plate, and the larger size will cover up that chipped plaster around the edge of the box. You'll also want to replace the plate on the adjacent box so that they look the same. I've had pretty good luck finding these type of plates at the big orange box store.