Great questions!
Here is a more thorough discussion. Conventional ignition and High Energy Ignition (HEI) systems are different technologies, having different power requirements. Conventional ignition uses a mechanical switch (the points) that directly cycles ignition spark to the plugs by turning power to the ignition coil on and off. HEI relies on a magnetic pulse to trigger a transistor that controls power to the coil. With conventional ignition, coil control is mechanical (the points). With HEI, coil control is electronic (pickup coil and module). Mechanical points arc when they open, resulting in wear from burning and pitting. HEI doesn't suffer from internal arcing, so there is no wear.
To extend point life, conventional ignition restricts current flow through the points and coil to ~3 amps by limiting the voltage applied across the ignition coil primary winding to ~8.5 volts - which produces reliable spark energy to about 4,500 engine RPM. On the other hand, HEI doesn't suffer from the limitation imposed by point arcing, hence, HEI earns no benefit from limiting coil current. Instead, HEI applies full primary voltage (~14 volts while the engine is running) across the ignition coil, which increases primary coil current to ~5 amps, extending reliable spark energy to about 7,000 engine RPM. Effectively, conventional ignition systems consume roughly 37% of the power used by HEI.
Well, the method that conventional ignition systems use to limit coil primary voltage is to add resistance into the coil B+ lead - hence (referring now to the factory wiring diagram), the pink, 1.35 ohm resistance wire (ckt 3) that feeds power to the ignition coil.
However, vehicle system voltage while cranking, prior to the engine actually starting, is effectively less than battery voltage (12.6 volts, versus 14.2 volts provided by the charging system once the engine is running). To compensate for the decreased voltage available while cranking, the yellow wire (ckt 7A/7B) connected to "relay" terminal "R" of the starter solenoid bypasses ckt 3 and provides full battery voltage directly to the coil ...but only while cranking. Once the engine starts, power transfer through the coil reverts through the resistance wire.
The problem that occurs when converting from conventional ignition to HEI is the resistance wire preexisting in the harness. If the resistance wire is not replaced with a standard copper wire, HEI performance will be severely limited.
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Both terminals in the cap are 1/4" spade. As Blazer explained, one is B+ in to power the ignition (https://www.summitracing.com/parts/sum-g5213), the other is Tachometer signal out, when used. The Tach terminal has a keying boss molded into the cap that prevents insertion of the B+ lead in the wrong position. The factory style Series 56 connectors lock into the cap. Typically the B+ connector is black, gray or natural, the Tach connector is most often brown and has a keying slot that matches the boss in the cap...
(http://forum.73-87chevytrucks.com/smforum/index.php?action=dlattach;topic=35286.0;attach=36992;image)
Occasionally, the B+ and Tach connectors are siamesed...
(http://forum.73-87chevytrucks.com/smforum/index.php?action=dlattach;topic=35286.0;attach=36994;image)
Factory style connectors use Series 56 female terminals. To remove the terminals from the connectors use a flat blade pocket screwdriver or a terminal removal tool (https://www.summitracing.com/parts/oes-25228)...
(http://forum.73-87chevytrucks.com/smforum/index.php?action=dlattach;topic=35286.0;attach=36996;image)
Thermal sleeve is not intended to wrap headers. For that specific purpose use header wrap (https://www.summitracing.com/search?PageSize=100&SortBy=BestKeywordMatch&SortOrder=Ascending&keyword=header%20wrap).