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That could be your issue. On my ’37 Champion, I initially had the points gapped a little too wide but still had what appeared to be a good spark at the plug in open air. But I couldn’t get it to fire off and run until I reset the points to the specified gap. The starting instructions also say to advance the timing lever slightly to the right of center, but on mine I had to move it a lot further to the right before it would start. Every motor is probably a little different but you might try that on yours as well and see if it will fire up.
Bob
1937 Champion D2C Deluxe Lite Twin
1954 Johnson CD-11
1955 Johnson QD-16
1957 Evinrude Fastwin 18
1957 Evinrude 3022
1958 Johnson QD-19
1958 Johnson FD-12
1959 Johnson QD-20
1982 Evinrude 25hp
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