If you install a ballast resistor, then you will want a bypass wire off the starter while the starter in engaged.

As for the points. To test if they are working or not you make sure they are closed and measure the voltage on the + terminal of the coil. Then make a jumper wire and touch it to the - terminal on the coil and touch it to the engine block. If the voltage changes (lowers), then there is a problem in the points.