No, the VEMS common ground should not be connected at the same spot. I usually put the common ground in the chassis and just make sure the engine is well grounded to it, the generator and starter motor in particular. Some conflicting advice about this in the guide, I know.
I would start out with a 10A fuse and 2 ms dwell for the coils. Up the dwell in case of mis-fire or suspected poor spark, try 3-4 ms to see an improvement. Don't go with a bigger fuse if it blows, think about what you're doing.