As an owner of both, I can say the DK-21M is certainly compatible with the D70. It does not require any adapters. B&H's recommendation for the DK-22 adapter is dead wrong. You could hook the DK-22 to your D70, or the DK-21M, but not both at the same time. I think the confusion might come from the fact that back in the good ol' days, pre-DK-21M, we D70 owners were using the DK-17M with a modified DK-22 to hold it on.
I do hear of glasses wearers complaining about the extra eye relief making the DK-21M unusable. Even with my naked eye pressed against the back of the magnifier, I sometimes lose sight of the corners of the viewfinder, which I don't mind at all.
I think you're right to assume that it won't fit inside the Ike housing. Good thing it has its own magnifier built-in!