That's the problem when you use close nipples like you have.
The fittings butt up sometimes before they get good and tight.
Try teflon tape, you can build it up with more raps around the pipe going counter clockwise so it won't back off and that might get the valve tight where you want it to be.
If you didn't already you can put some pipe dope ( sealer ) on the unions were they mate up inside to seal them good too.
I'd be carefuf not to tighten the nipples into your water seperator too much the plastic could split.
I havn't done any plumbing in years but using heavy gauge plastic might be the way to go now days if it will take the pressure.
