John that coil wire end (High tension wire out top of coil to dist cap center) looks questionable, it usually has a rounded metal termination (not just a short bit of coil wire) that fits down tight in the coils top center HV tower. While the spark might still jump what you show is NOT proper and needs corrected with a new coil wire (top center HV coil tower to center of dist cap).
If you put a 6/12 test lamp (or use a volt meter) on the coils small side input terminal that's wired to the ballast resistor, it should come ON anytime the Ign Switch is turned ON...............Place it next over on the coils other small side terminal (one that wires to side of distributor) turn on ignition and crank engine over IT SHOULD FLASH ON (when points are open) BUT GO OFF (when points are closed).... If it never flashes ON and OFF shes not gonna work right. If it stays on regardless of engine or dist position or when cranked over shes never gonna work...
NOTE to your statement "Then, I checked the two wires that go out of the coil, I am not sure what they are called. They both lit up my test light, so I do not think that is the problem"
Again, the small side input terminal should come on and stay on anytime ign switch is on HOWEVER the lamp on the coils other output to dist terminal should only be ON if points are open but go off if closed IF IT STAYS ON shes never gonna fire because a good set of working and proper gapped points should close fully which takes that to ground causing the light to go off
You need to take the dist cap and dust cap off and insure the points are good and gapped closing fully AND NOT BADLY BURNED OR CARBONED OR PITTED SO BADLY they arent workign and the light going off when they are closed
BOTTOM LINE that coil wire end looks BAD and the points may be burned or pitted or not fully closing. They may need replaced if badly burned or pitted. If only gray oxide coated you may be able to clean/buff/polish them but if bad burned a points file might get you by but Id replace them.
CHECK THE POINTS THAT MAY BE THE PROBLEM !!!!!!!!!!!!!!!!
Im sure I missed a few possibilities, I only intended to cover a few of the most basic, hopefully others can add more to this and other possible problems. Most are probably in my Troubleshooting procedure
For a more detailed step by step procedure to find the problem copy and print my Troubleshooting Procedure and work through it.
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