I agree with most of Ordy/s post and as mention distributor timing can be subjective.

In regard to vac can position I typically set it mid-point between the firewall and the manifold facing left, [drivers side]. And yes #1 can be anywhere as long as the rotor is indexed correctly. I like to have #1 pointed toward cylinder 1 which is close to factory.

In terms of vacuum to the can, full vac will provide a faster vacuum rate which may not be desirable as it may not be compatible with the distributor curve. The distributor curve is set by the tuning springs which control timing ramp. For example if you have a low rear end gear, [4.11:1] you can ramp timing much quicker. And vice-versa, if you have high gear, [2.78:1], you'd do better with a slower ramp so it doesn't ping. Distributor tuning if done right can provide max power without pinging or detonation. I prefer to run ported vacuum [based off of throttle position] which was originally meant for the distributor. If you run full vac, you may need to slightly retard the timing to offset the higher/quicker vacuum.

re: overheating; my engine like many others ran hot with the factory high compression heads. The issue was low octane fuel and not being able to tune the engine without pinging. Now that I have ported 6X heads, I have more tune-ability in the timing and never overheat.