As stated disconnect and plug the vacuum advance and if the rattle goes away you have spark knock. If this is the case, it's just a matter of getting an adjustable can and setting it for less timing.

As for your other questions:

1) Depends. Are your heads original? Closed chambers tend to like more timing, so the factory distributors have a bigger curve. If you are runnig an HEI with older heads you need to make sure the total timing is the same. So compared to points you will have more initial timing. This will probably be okay as the engine will probably like more initial.

2) Type of plug will depend on the heads and the ignition. You need to verify your head codes, so you have the correct plug thread and length. For HEI, try a colder plug than with points and set the gap to 0.045". This could actually be part of your problem.

3) See point 1. This will depend mostly on which heads you have. Find your codes and verify on www.wallaceracing.com You need to know your compression ratio and whether they are open or closed chamber style.