You didn't include any of the part files to go with this assembly. I might suggest replacing your attachment with a "Pack and Go" from the assembly (SOLIDWORKS Help - Pack and Go Overview) that would include all necessary files to see what you have.
Based on what you describe though it sounds like you have possibly modeled these joints as a press fit. If that is the case then you would need to use a specific contact called "Shrink Fit" (SOLIDWORKS Help - Simulation: Shrink Fitting). The shrink fit is designed to recognize purposely modeled interference in order to expand one part and compress the other in the analysis.
Otherwise, if your interference is not necessarily on purpose or not uniform across the interacting surface of the joint you would either want to make it uniform in order to use Shrink Fit or remove it and use a different contact definition. In either case, you would want to make one of your first steps inspecting the interference with "Interference Detection" (SOLIDWORKS Help - Interference Detection)
To add to what Ryan Dark posted; if you have matching surfaces in the M&T joint - not press fit - you might be able to apply non-penetrating contact sets between the parts. HOWEVER, this may lead to things flying apart and you'd need to be judicious in adding b/cs or inertia relief, friction, etc. to counteract. Somehow the stress must be transferred.
One of the important parts that simulation won't calculate is, short grain and coarse grain material. Construction joinery can look strong, but if the grain is running at an angle or the wrong way, pressure will cause it to crack and fail. Plus using a mortise and tenon connection won't assure the design, if you don't add a glue well behind the tenon, it will blow out and split...