I have a 1971 rt2 360 reed valve engine running on points ignition and wondering if it is possible to fit the early flywheel off the rt1 piston port engine as it has centrifugal advance mechanism, can I still use my  rt2 stator and coil setup & just fit the flywheel  ?
any information greatly appreciated. 

The stator plate is different for the flywheel with the mechanical advance. They don't interchange.

Also confirm what you have. 1971 360 is called 1971 RT1B 360 and it is a piston port engine. 1972 360 is called 1972 RT2 360 and it is a reed valve engine.

Engine is a later reed valve engine with fixed ignition timing but I was hoping to take a step backwards & have an ignition system  that would advance as the revs increased as currently I have a vape system correctly timed a 2.9 btdc and a clear of carbon exhaust & boy there gutless so I'm hoping to have a play with port timing and compression ratio.

Engine is a later reed valve engine with fixed ignition timing but I was hoping to take a step backwards & have an ignition system  that would advance as the revs increased as currently I have a vape system correctly timed a 2.9 btdc and a clear of carbon exhaust & boy there gutless so I'm hoping to have a play with port timing and compression ratio. Also have 2 sets of points systems and 2 flywheels
 

The purpose of this mechanical flywheel was not really to advance the timing or be variable through the rpm range but delay it at low rpms while kickstarting it to make it easier to start and then when it got above idle it would be at the standard timing spec. Then Yamaha came out with the decompression valve in the front of the cylinder. Also, this mechanical device was prone to wearing out and getting loose. I had one that was pretty well shot and have seen others that were unusable.

Some people use a Harley 32076-04 compression release valve to help with starting 

Last DT250 "79 or DT400 would be a good swap complete.
Reliable & retards for starting plus Bolt straight on.
On my RT1 mix n match motor i had the advance retard cam magneto plus the cylinder decomp.
Was low on comp as was worn out so could start it almost by hand if i was brave-stupid enough.
Was good, but they do wear where the spring arm engages in the cam, plus cam needs lubing underneath & the spring arm.
One year DT175 had that too.
Or easier still, keep the timing back to 2.5 as MarkT will tell you--good plan.
Also be very sure the original deconp is clear of carbon not only in the unit but also the cylinder hole plus the hole leading straight down to the exhaust outlet.
I'll go back & read later as likely this has all been covered.

If your RT2 is "gutless" it is likely a plugged or restricted exhaust. Also, the original carb used a side main jet in the bowl and the O-ring on the "jet setter" (located where the main jet would be on most Mikunis) may be split or missing, causing it to run rich.