Proper Distributor for HEI Conversion

Up and down play is normal. If you are going to run that blue ford ignition coil it has a male end on it and the distributor you pictured has female ends on it. Not sure if you have an ignition coil wire with one female and one male end. I believe your current stock setup also has a ballast running to your coil which you should bypass to get maximum volts to your new coil (if your new coil doesn't require a ballast resistor if it's a low resistance e-coil which it appears to be).
Are you using the bracket that bolts the HEI module to the bottom of your distributor (Mopar HEI Conversion)? Make sure you use the thermal paste that should have come with your new HEI module to mount it.