I would try to avoid blatant damages in case there are security cameras recording. However, I think you're on to something...

OP could line the edge of his car door with some of those foam stick-on bumpers meant to help prevent accidental dings. People use them all the time in Korea since parking is so tight there. They actually work pretty well if you position them properly and use enough of them. OP could then lightly-moderately bump his neighbor's car with his door while the neighbor is still in the car. That would be enough to spike his blood pressure for at least a brief moment. And he could repeat this as often as he wants. It seems like a reasonable accident to keep occurring considering the circumstances. If the neighbor accuses him of doing this on purpose, OP could point out that he has been as accommodating as possible and even mounted the ugly bumpers on his own vehicle as a way to peacefully deal with the neighbor's inconsiderate parking.

OP can also lean and slide against the neighbor's car whenever the space between their vehicles is particularly tight. Meaning, he should make zero effort to avoid touching the car from now on. He should rest his dirty, greasy hand on the car to support his weight as he tries to slide out through his own door. He can slide his hand to a new spot so he can support himself as he bends over to retrieve the keys that he accidentally dropped. He might even graze his unwashed, ultra greasy hair and super oily face along the side of the car as he blindly searches for the keys on the ground. He could even pretend to lose his balance while trying to side step his way out of the tight space; he could use it as an excuse to face plant his mug on the back window. (That may actually be the tipping point. 😅 Can you imagine seeing someone's face print smeared across your window?)

All of this would work even better if the neighbor has an alarm on his car. He would constantly have to check to see what's happening every time the alarm goes off. He'd see the OP clumsily doing whatever up against his car. OP could even start parking closer to the line, too - just to narrow the space and help justify his antics. I bet it would also alarm the neighbor if he caught OP looking under his car with a flashlight late at night or early in the morning. OP could claim to have dropped something, which he has a hard time seeing since the space is so tight.

Basically, the OP can frequently "hit" and touch the car in ways that don't leave any permanent damages that he'd be liable for. But the things he does will remind the neighbor that he's parked way too close.