Yes, tighten the bolt to raise it, loosen it to lower. You'll want to get it re-aligned after the adjustment, as the ride height change will alter the camber and toe settings.
It does strike me as being odd that the truck would sit lower with a 305 in place of the 235, the 305 is a lighter engine by about 40 pounds. If anything, it should sit up higher. There's a possibility that your torsion barn might be a little weak. I don't know of any replacements being produced for them at this time, or if bars from a later truck ('88-curent) 3/4 ton will work.
