Stall and Shift RPM Question.

You don't NEED an MSD distributor. MSD's are much easier to dial in.

MP style distributors, especially the older models, generally require substantial disassembly/work to alter the mechanical advance total and curve. The initial timing on your engine is likely a bit low for where it would run best. It's lots of trial and error. There are a couple of good articles floating around that address the welding, etc.

A 360 with a XE268H and similar intake will usually make power to 5400-5500 rpm. In a 318 with the same components, making power at 5700+ would not be out of the question. Your engine may start 'pulling' at 2500, but it's going to really start "getting it" after 3500 rpm which is closer to the tq peak. I'd buy a quality converter with a flash rpm that gets you closer to your tq peak numbers.

Next time you go to the track, try increasing your timing. That engine may like as much a 40 degrees total without vacuum advance. If you advance timing and the car picks up MPH, you are headed the right direction. Pull a plug and inspect it for speckling on porcelain, that's bad and signs of detonation, back off timing a little. I agree with mderoy, it could likely use more initial timing.

I have a saying, "pick your parts, pay your money"

There's plenty of information on the internet. Some good, some bad, lots that is BS. You have to sort through the garbage to get to the good stuff, which is unfortunate. Lots of ways to skin a cat in this game.