well this thread is pretty much the guide to porting, especially after mac's responses to my questions. Mac if you just wrote a little about grinding method etc for those who are doing this for the first time this would be pretty much complete.
as for timing, yea it will make a difference. But increasing the advance your engine will run hotter, you also run the thread of pinging (pre-detonation of the mixture) which is the worst thing for any motor besides a 4stroke with no oil. Step by step instructions here:
http://www.50mods.com/articles/mods/timing.asp
Im not sure how much advance it will give you by doing it that way, im sure there are other methods of getting more advance... that is the way i will do it (ream out the holes as far as poss). Make sure after doing it you listen for pinging, will sound like a nut rattling in your exhaust.