As Bee stated barometric pressure does effect altimeter readings but not very much. They do re-set the altimeter based on local barometric pressure.Usually every contact with air control you will get a altimeter setting.I read the NTSB report and as I recall they were flying VFR on a cloudy stormy night which were really IFR conditions.Poor visability and deviating from the flight route was the cause of flying into the mountain.
Here is a report blaming the probable cause on the pilot deviating from the normal recommended course.
http://www.airdisaster.com/reports/ntsb/AAR70-05.pdf