Re: Dumb coil question.
Positive or negaitive makes absolutley no difference. A coil will work either way, just usually at higher revs, will misfire if backwards.
It doesn't matter for testing purposes.
If the points make the test light blink on the dist. side of the coil primary, you have two choices. Bad or mis-connected condensor (the condensor is needed in the circuit for spark arc control at the points and for development of the spark in the primary) or bad coil.
When the points open, the current through the coil is disrupted, and the field collapses. The collapsing field tries to maintain the current through the coil. Without the Condenser, the voltage will rise to a very high value at the points, and arcing will occur.
The principles of inductance create a kind of paradox, because when the points open and the magnetic field collapses it also induces a current in the primary as well. It's not very much because there are only a few windings in the primary, but it's enough to jump a small air-gap, such as the one between the just-opening points in the distributor. That tiny spark is enough to erode metal away from the points and you'll 'burn' the points. It prevents the points from arcing and prevents coil insulation breakdown by limiting the rate of voltage rise at the points.
Test one: Pull the coil wire out of the centre of the dist. cap, see if you have spark there.
Next, if you have an ohmmeter, check the resistance of primary and secondary.
Three, check or replace the condensor.
Four, replace the coil.
You can jump to four, the most expensive item, and find that isn't it.
I've been doing this for a lot of decades......you get to the point you just do the proper sequence of troubleshooting, and you find it.
Is the condensor wire on the same side of the insulator as the point spring and wire?
Reason I ask is didn't you mention seeing sparking at the points? Unless very dirty of corroded, you generally won't see much there.