Checking spark in direct sunlight is always pretty difficult. With a Honda electronic ignition I find I can't really see the spark that way, but I can hear it click as it arcs.
The tappet clearance is critical, and is often neglected with side valve engines like yours because it seems to change so little. Over long periods the valves may tend to pound their way into their seats, which decreases clearance. If it decreases very much from what it should be, the valves will not be able to seal against their seats, and will burn, resulting in hard starting and low power. The valve clearance on a side valve engine exists without you having to lift or push anything: the tappet should not touch the valve stem, the full clearance should exist statically so long as the engine is in the correct rotational position.
Check the tappets on that engine by rotating the engine until it is just past top dead center on the firing stroke, then carefully slip the correct size feeler gauge between tappet (i.e. cam follower) and valve stem. If you think it is difficult with a side valve engine, don't try it with an OHV engine where you have to work with the feeler gauge curved, yet still get a sensitive feel for how much pressure is being applied. Lawnmower engines have very puny valve springs, and you can quite easily force the feeler gauge into a gap that does not even exist, just by pushing on it. When there is some slight clearance, you can easily be fooled into thinking that there is "hardly any" drag on the feeler when in fact it is lifting the valve off its seat: those springs are really weak and don't press very hard on the feeler. Too little valve clearance is much worse than too much, as far as damaging the engine is concerned. Remember, the test is performed with the engine cold, but because of metal expansion the clearance usually decreases as the engine warms up - especially for the exhaust valve, which is very hot indeed when the engine is running. Because of this the specified "cold" clearance for the exhaust valve is usually greater than for the inlet valve.
My method for checking lawnmower engine valve clearances is as follows. Take a gauge that is mid-way between the minimum and maximum thickness for that valve (inlet or exhaust) and see if it will slip between tappet and valve stem without touching: very, very free-sliding fit. Then take one that is 0.002" thicker and try that. I expect zero resistance from the nominal one, and mild tightness from the over-thickness one.
All this is different from checking the valve clearances on a car, where there is no chance of sliding the feeler around if it is lifting the valve: cars have relatively massive valve springs. Checking lawnmower clearances gives you a chance to practice that surgeon's touch.
