Yes that's right, it means salami and in spanish it's used to call someone an idiot. Soft insult, but I use it, and saying so and so is a salami in english would only get me weird looks.
That's interesting, I didn't know. It seems gammon makes reference to the color red and to anger, and according to the link, it has some political connotations. None of that is applicable to salame, it's not so much about being angry or hot headed in any way, it's just a way to say someone isn't the sharpest tool in the shed.
Calling someone a 'silly sausage' in English is a very gentle way to say they are being foolish, sometimes endearingly. Typically it's used for children. So not far off!
Definition of meathead seems to check out, but Ive always seen it used with the burly/jock type of connotation. Never heard anyone call a cute child, or a businessman, or a hot looking girl a meathead, but maybe I'm wrong as usage may vary in different places.