Why does God desire glorification? If my interpretation of the ultimate purpose of human existence according to the Bible is correct, humanity exists to glorify the existence of God. In Isaiah 43:7, it is stated "everyone who is called by my name, whom I created for my glory, whom I formed and made.” This outlines humanity's purpose as a device to glorify God.

But if God is a perfect being, why does he desire to be glorified? Normally, this characteristic would be associated with a being that is insecure or narcissistic, which are not to my understanding perfect traits.

Surely this  is a pretty fundamental attribute of God for which Christianity surely has a doctrine. In there a specific theological term used for this topic? And what do different Christian theological traditions teach about this issue? Is there there a general explanation that is broadly agreed on explaining this attribute of God or are there different explanations?
Starting from God requesting us to glorify Him is starting from the end of the order of things.
First and foremost, God deserves to be praised. Hence His request for it from us. That is the correct order of things. Not to glorify God for us is equivalent to not understanding our place in the world, and our relation to God. We are His creatures. Everything was created by God (by the Father through the Son of God, Jesus). Or do you think human beings are good and powerful enough to compare with God? The creature more than the Creator? (Ideas developed more here).
Hence, from our position as creatures, it follows that we must glorify Him. In fact, it is a basic movement of the heart in Christians (as so beautifully expressed by so many hymns and writings of Saints) to praise God for the marvelous gifts received (including life itself, nature, etc). For instance, St Paul writes to the Romans (11:33-36):

How rich are the depths of God – how deep his wisdom and knowledge – and how impossible to penetrate his motives or understand his methods! Who could ever know the mind of the Lord? Who could ever be his counsellor? Who could ever give him anything or lend him anything? All that exists comes from him; all is by him and for him. To him be glory for ever! Amen.

If God would not ask us to glorify Him, God would be lying to us. Jesus Himself said (John 13:13):

You call me Master, and Lord; and you say well, for so I am.

This is, saying the truth is saying well. Hence, worshiping God is doing well too. If God would not asks us to glorify Him, we would not be doing well. Hence God's call for us to worship Him as what he truly is, God our Creator.
The entry on Glory in the Catholic Encyclopedia also mention this acknowledgment:

... glory is equivalent to praise rendered to God in acknowledgment of His majesty and perfections manifested objectively in the world, or through supernatural revelation.

Notice also that a narcissist needs to be hailed e.g. to fill in self-esteem vacuums. God however needs nothing. The same entry above states beautifully:

Infinite, He possesses the plenitude of Being and Perfection; He needs nothing, and can receive no complementary increment or superfluous accession of excellence from without.

This is, our act of glorifying God does not expand God in any way. By glorifying God we are simply acknowledging the true order of things. It is just reasonable for God to asks us to recognise this true order of things.
Thus, if God is immutable to our glorification of Him, what is it's purpose? St. Aquinas touched upon this in his Summa Theologiae, Question 123:

As Augustine says on John 13:13, &quot;You call Me Master and Lord; and you say well&quot; (Tract. lviii in Joan.): &quot;Self-complacency is fraught with danger of one who has to beware of pride. But He Who is above all, however much He may praise Himself, does not uplift Himself. For knowledge of God is our need, not His: nor does any man know Him unless he be taught of Him Who knows.&quot; It is therefore evident that God seeks glory, not for His own sake, but for ours. On like manner a man may rightly seek his own glory for the good of others, according to Matthew 5:16, &quot;That they may see your good works, and glorify your Father Who is in heaven.&quot;

God created us in order to share His life with us. That was a selflessness act of Love. God, loved us first, and made us to love Him and love our brethren, and to have eternal life in Him, in perfect happiness. This is quite the opposite to the narcissist God commonly attributed to Christianity.

Notice also that the concept of glory has different meaning across Scriptures. In fact, the quote in your question refers, in my opinion, to the case of the creation of God as a sign of God's powerfulness. This sense of glory if more in line with that which is referred to in the Jesuit motto Ad majorem Dei gloriam (to the greater glory of God). This is often is explained as meaning that the glory of God is the salvation of its creatures.