The .357 Magnum was indeed derived from testing hot loads using .38 Special brass, and they intentionally used longer cases for the .357 so they would not fit in a standard .38 revolver. The reason being the .38 weapons were not designed for the higher pressure and they wanted to keep accidents from happening. Actually, the .38 Special is really a .357 diameter-wise. An experienced reloader can make magnum loads using standard .38 brass and fire them in a .357 revolver. Also, I often fire .38 Special rounds from one of my .357 revolvers since it is cheaper and the recoil is not as raunchy. I've also handloaded .357 cases to .38 Special levels.
The same thing happened for developing the .44 Magnum off of the .44 Special round, except in that case the diameter for both is 0.429".
I loaded a lot of 'nape' when I was an aircraft ordnance technician in the Marines. Ours was not especially safe to be around, on either end. Napalm is still 'legal' as far as I know, but the U.S. has a different version of it now that is more stable to handle.