I think with the two closest points you might still get weird twisting... An extreme example: Let's assume both circles have the R=1. If the first circle's centre is O, and it is sitting on X-Y plane, and the second circle's centre is sitting at X=1,Y=0,Z=0.01, and it just slightly tilted in the growing direction of X, the closest points on the two circles will for sure get the "weird twist" you are trying to avoid. Since the closest points would not get you the weird twist in case the second circle is at X=0,Y=0,Z=0.01 and is equally tilted, then at some point the statements "aligned to two closest points on two circles" and "no weird twisting seen" no longer correspond to each other.
Assuming this can happen within the constraint of NURBS, here's another idea. In the start, take the three points on the NURBS curve - two that belong to the centers of your circles, and the third one precisely inbetween. Draw a plane between the three. This plane will cross the two circles at 4 points. Two of these points will be on the same "side" of the line that connects the centers of the circles - they are your alignment points.
For the next alignment points you would take the alignment point of the "previous circle", and draw the plane between the center of the "previous circle", this alignment point, and the center of the "new circle". From this you get the "next alignment point" based on the intersection with the other circle.
Next step - "previous circle" = "new circle", and the "new circle" - your next one according to the NURBS curve.
If the radii from the centers of the circles to the selected alignment points cross, you know you the picture will look a bit ugly - that's the scenario where with the "closest point" algorithm you'd still get the weird twisting.
I think the coordinates of the point on the circle that is intersection with the plane going via its center should be easy to calculate (it's a point on the line made by intersection of the two planes, one of the circle and the target plane; at the distance R from the center).
I don't have the rigorous proof to fully assert or deny the above - but hopefully it helps at all, and I think it should be quick enough to verify, compared to calculating the closet points on the two circles... (If there are any flaws in my logic, the corrections in the comments are very welcome).