It doesn't really matter if the distributor has to rotate a little to match up with #1 as long as you have some adjustment room left before the vacuum advance mechanism hits something. If you want you can set it up so that the number 1 tower points towards the rear of the vehicle. The only important thing is that the Number 1 plug wire is connected to the tower that the rotor/reluctor passes when cylinder 1 is just before TDC and it's intake and exhaust valves are closed.
The relationship between the rotor/reluctor and the engine block isn't important. Only the relationship between the rotor/reluctor and the distributor cap matters.
It took me a while to figure that out, but sticking distributors has been a lot easier since then.
