Hi Greg
1: Yes you only need the one coil on the stator plate, the others would have been for lights / battery charge etc
2: Yes the third wire would go the the ignition coil
3: A kill switch should ground out the small wire to the ignition coil, share the connection for the third wire as above
4: Use any coil you like either a new one or one from a small 2 stroke 6v machine
5: Thats a good plan, just check any numbers stamped on the two rotors match up
6 : yeah its before top dead centre, clymers goofed?
Try googling 'Energy Transfer Ignition'