Squareback vs round back alternator?

Also I have noticed the AMM just moves a bit to D(echarge) while starting
This is correct. Power to the starter solenoid and coil goes through the ammeter and key switch.
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Current draw for each item is approximate as I do not have a 1960 specific manual or Sun card. My point is to illustrate the current paths.

The voltage at the coil during start should be very close to the battery voltage during start.
Battery voltage during start should be at least 9.4 Volts. I don't see any reason why 1960 would be much different.

nd while the engine is running and the ALT is charging it moves up 2 mm into C(harge) also when all lighting and other users are ON.
If the lighting and accessories are still wired to draw power from the battery side of the the ammeter, that is what you are seeing on the ammeter.
Otherwise you should only be seeing battery recharging on the ammeter.
As far as the voltage measurement. I suspect this will depend on how the meter measures the cycling as the points open and close.
Votlage drop across the resistor for a steady flow (points closed) is current multiplied by resistance. Assuming 3 amps through the coil 12.2 Volts is about right.
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Ammeter will show battery charging. Illustration shows 6 amps but it will actually range from 10 to 20 amps after starting to 0 amps after a few minutes of charging.
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Any additional items attached to the battery positive terminal will make it appear as if the battery is charging when they are turned on.

Old plugs left: Champion RN14YC, new at the right Denso W14EXR-U
I couldn't get the Champion within a few days, so I cross checked with the WS manual ref no. "AG 42" and the Denso plugs were recommended. Shorter body, resistance the same. What do you think, any recommandations?
The nose doesn't look much shorter. Try it - see how it runs.