H fanbelt needs to be tightened?

I had pretty good luck cleaning mine with a can of spray Gum-Out, a small brass-bristle brush about 1/2" wide, and some PB Blaster penetrating oil. Mine had the usual build-up of crud on the threads, and had accumulated a tremendous amount of fine dust into the threads. This dust had effectively locked the hub of the pulley in place so tightly that the setscrew and nut would not have been needed!

Use some caution when attacking the hub with a punch to turn it. Don't lose patience, or you will hit it too hard, crack it, and then be in for a much larger adventure. Turn the setscrew hole to the top, flood the inside of the hub with the solvent of your choice, then work the hub back and forth as you are able to. It may need to soak all night before you can move it. Once it starts moving, keep working it both ways until it becomes free enough to turn with your hands.

Take a good look at that belt when you start this project. If it's old, hard, cracked, or visibly worn, you may want to cut it off and make the job of loosening the hub easier. If you end up replacing the belt, you probably won't have to do all this for another 30 years or more.

You are correct, you need to loosen the set screw.
It needs to be loosened enough to allow the collar to turn, might just be easier to take it completely out.

Usually there are two points on the front half of the pulley where you can take a long blunt end punch and turn this half of the pulley clockwise to tighten the belt. One of the areas where you can use the punch is where the set screw is. Clockwise is determined by standing in front of the tractor.

If the area is covered with 50 years of crud, it is difficult to see how this procedure works.

Good luck.