I need to read the story fully later but if you just want simple lights the yellow from the mag should be highest output so just connect all your lights, head, tail, instruments to the yellow via a switch but with a 6volt ac regulator involved. Have switch so it stops the yellow before the regulator is involved otherwise the regulator might overheat trying to dump all the yellow voltage. Here's an example. Not sure why they say 6-12-24 volt as it'll stop voltage at about 7-volts normally if your mag has the capacity which it should have no trouble. Just the first sample i could easily find but they'll be up there somewhere cheaper than that. Maybe not cheaper now i look. Think that was cheapest i found.
www.aliexpress.com/item/1005009349259663...%7C_p_origin_prod%3A

im in mode 3 like a dirt bike. bike is pretty naked too like a dirt bike. ill worry about lights later but first time been told what exactly to do on here so thanks. i got one of those regulators.
i just got a wave washer in mail for idle gear so hopefully my clutch will now work. theres been a real heat wave at night even and havent got stuff done.

That's good. We like updates. Cheers.

Small progress update. With the help of 'Enduro Nut' we were able to determine that (after one incorrect flywheel) what I have is the elusive spring loaded advance mechanism, which means a different flywheel.

Many of you probably already know this, but the standard flywheel lobe is slightly smaller than the 'other' flywheel lobe, which meant the standard one I bought didn't operate the points.

I had two choices:
1. Find the correct flywheel to work with the existing stator set of three coils, points, condenser (I had just replaced the points and condenser).
2. Find a different stator (standard style) to work with the flywheel I just bought
3. (not a real option) go full CDI for ~ $650

Anyway I found the correct flywheel on ebay for a fair price, spent FAR too long setting the points gap, and now (after a carb rebuild as well with a Keyster kit) it starts on the first kick and runs beautifully!

On a side note, I went through several NGK plugs, all had terrible spark. I found a lawnmower "E3" brand plug in my garage and it seems to be a game changer! It has a split tip, so basically a triangle of bright blue fire. Same dimensions etc. Model is E3.18

I still need to figure out the wiring, I may go with separate switches per circuit based on "PABDT"s directions, as I cannot find a replacement ignition switch. But most importantly, the bike is viable and worth some investment now! hooray.

I appreciate the help & support so far.

I would not run that spark plug under load.  It cross references to an NGK "6" heat range and would likely overheat, cause preignition, and destroy the engine under load.  

Well thank you for that warning. I see what you mean! I will revert to a B8ES or equivalent. I will consider it your fault if it no longer starts on the first kick though 

There seem to be a lot of counterfeit NGK plugs out there, so buy from a bona fide motorcycle shop, rather than Amazon, ebay etc.

Some members here recommend an alternative make of plug (Autolite?) - maybe search the forum for posts on this, or wait for someone to chime in with details.