Basic wiring diagram for a points/condenser ignition. The two sets of points are jumpered together, with the condenser and coil negative(ground) wire attaching to the same place on either set of points. Or put the condenser on one set, the negative on the other. Really doesn't matter.
You don't have to have the wire down to the starter terminal. It just makes starting easier because it shoots 12V to the coil during starting. This is a Ford type solenoid, but you just put that wire on the solenoid terminal your not using to energize the starter solenoid.
Mount the coil terminals up, in vertical postion. Not because of oil or what ever. Its because the coil inside the can is only supported from the top of the coil. In a horizontal position, pounding and vibration can cause the internal coil to touch the can.