The vac advance should indeed be connected to "ported"vacuum. Look above the throttle blades for a small slot, and trace that slot with carb cleaner spray (witht he red straw) or light compressed air to see where to port comes out of the side of the carb at.
WSA is right about initial timing and total timing. They are two dynamics that need to be optimum at two different RPM ranges. It sounds like you are willing to play with this a bit, so here we go....
(Do all measurements with the vac advance hose off, by the way....)
Fiddle with initial timing until you find where you get best off-idle throttle response and low end torque. you won't need to go over 2000 RPM's ever while testing this. Find an abandoned street or parking lot to do this in, because if you make any torque at all, you will be making lots of tire noise and laying rubber as you find your best "off idle" torque timing!! Record the number you have found......
Now, having done that.....put the light on it, and get it above 3000 RPM's so you can see how much total you have. If you are around 42 degrees total (easy to do if you added a lot of initial advance timing) then you will need to take some mechancial advance out. Find your best "total" timing by finding where the engine runs the strongest at higher rpms (lots of distribuotor moving around)
Now you have best initial and best total. Subtract the differences between the two numbers that you had to move the distributor around to get, and now you know how much mechanical you need to take out. For example, if you car has best initial at 16 degrees, but the best total was achived at 9 degres intial, then you need to take out 7 degrees of mechancial advance you you can run your ditributor at 16 initial and not be over-advanced at higher RPMs'. You can do this pretty easily by slipping a little piece of washer tube over the mechanical advance limiting pin that is under the moveable plate inside the distributor. You may not get the exact timing you need, but to do that maens the dist has to come apart and you have to move the advance limiting pin to the other stop in the advance plate or do some welding and filing to get it where you want it.
Most people don't want to get that in depth, and just find a nice compromise between the timing marks (less initial that what the engine really needs) but your engine will not be at its max potential doing this.