The divots are in the correct general area to be timing marks..
Try this.. it's a trailerpark method of ignition setting that will get you in the ballpark.
Get a piece of cigarette paper and slide it between the points' contacts. Slowly rotate the flywheel while tugging on the paper. As soon as the points open the paper is released and that's where spark happens.
This should happen near where the divot marks and engine block mark are in alignment. If so, you're close.
As far as the timing light, my guess is it's not hooked up correctly or you dont have enought battery voltage to make it bright enough to see.
Whenever i've done it, the light is obviously on (but dim) all the way around 360 degrees.