Yes metal expands when it gets hotter, but you’re not applying heat to “make the hole bigger.” When metal expands, it expands in all directions, not just out. You’re also not trying to soften the metal. Given that your next step is to apply torque, it would be counter-productive to make the metal pliable.

Different metals expand at different rates when heated, and this difference will cause the rust bond that has formed between the nut and the bolt to break loose. That’s why heat works.