You knew there was an opening for an SII, because you encouraged CoWorker to apply. Instead, YOU should have applied. You choose not to, so why should your boss pay you more, just because he hired CW for a different position?
If I were your boss and you tried to leverage someone else I hired in a position you didn't even try for, I would not only do nothing, I'd likely be a little annoyed.
If you want to have a conversation about salary, I'd do it almost entirely separately from the hiring of CW. "Hey, I've been performing well, I've been doing X and Y which are actually outside my job description and are at the level of SII, and I'd like a raise." <--That sort of logic, not "CW is getting SII money and I have more qualifications than him so I want more money," because the answer to that is, "then you should have applied".
If a guy with an MBA takes a job at McDonald's, he can't ask for corporate pay if he took a job manning the drive through. And especially not when there was recently a corporate opening, he knew about that opening, and didn't apply.