at least you know oil is getting to the camshaft that side! the seal does tend to leak a little bit, the smoke will be caused by a faulty valve seal which sits around the valve stem, they tend to go hard and leak. this will prevent a clean start up with the bike left standing, but clears after it runs a bit!
points should be dry as they are electrical
make sure the advance mechanism is lubed up so the bob weights can move freely