Well, since in Japanese this is a literary tool to give double meaning to the word, your goal as a translator would be to use a similar technique, or at least have the desired effect. For the Hagane example, the kanji refers to a small person of the flask. In English writing, it would be similar to change the tone of the speaker rather than give a direct translation.
What do I mean by this? An example would be for the speaker to say "Tight spaces are your specialty, right, homonculus?" (Speaking to the particular homonculus.)
I don't know the specifics of the story, but, in translating, it is ideal to re-write the text rather than giving direct translations. You are an author, pretty much. The original text is your base, and your English literary approach will play a large role in bringing out a similar literary effect as the Japanese text's literary devices.