I think there was a misunderstanding when you read the manual. You don't hold the spark plug a quarter inch from the engine, you hold the end of the plug lead a quarter inch from the engine. If you are using a spark plug for the test, you ground the spark plug body to the engine, as you did, and watch for an even series of blue sparks across the plug gap. There won't be any cracking noise if you do it that way. If you have a healthy new magneto (i.e. very strong magnets) and you do the test without the spark plug, you will get more than a quarter inch of spark and will hear a crack. However magnets weaken with age, and normally if the engine is more than say 3 years old, you should use an old spark plug with the gap increased to about 0.060", and ground its body. If you get an even stream of sparks across that gap, you should be happy. That is the Briggs & Stratton recommended test.
It sounds as if your spark is at least reasonable. If you have an old plug handy, set the gap to 0.060" and try it. Don't panic if it won't spark across that gap though - there is often leakage across the surface of the central insulator, so sixty thou is quite a lot to ask of an old plug. The Briggs test uses a special test tool rather than a spark plug, but it does use a 0.060" gap. Meanwhile don't worry, you have enough spark to run the engine.
