[dcb]

That extra key position lights the taillight and nothing else, like a cheezy form of hazards, you will never want to use it probably.

It may be running out of spark at high RPM, so give the cap a try if you like.

If you have a hard time kickstarting it, disconnect the yellow and red wire at the solenoid (leave it disconnected) and hold the starter button in whilst kicking. The button itself is what disconnects the headlight and energizes the solenoid.

It should make electricity all on its own with the permanent magnet alternator.