When you spin an engine over to start it up, the piston tries to suck an air/fuel mixture into the combustion chamber for the spark plug to ignite it. If you apply the choke, then you are cutting off the volume of air that can flow through the carb but the suction from the piston remains the same.
If the piston is unable to pull air through the carb, then it will try and pull air from any other source that will supply some. Well worn rings can allow air to leak past them but more often than not, it is worn valve guides that supply oil-laden air to the combustion chamber resulting in the blue smoke you see. Blue smoke is from burning engine oil with the air/fuel mixture. Once the engine starts, warms up a bit and you back off the choke, then the oily air getting past the rings and valve guides stops and so does the blue smoke.
Most air-cooled flathead engines call for straight 30 oil except when the temps fall below the freezing point. Using 10/30 or 5/30 oil isn't a problem providing you keep a close watch on the dipstick and top up the oil level every time you use the tractor. And if you are using it for more than 3 hours straight, then stop and check the dipstick before continuing.
Multi-grade oils are a wonderful invention BUT..... the old engines will devour them faster than if the straight grades are used. Don't lose your engine because you forgot to check the oil level. You probably have several years of good service in those engines before they need rebuilding. Once you see blue smoke all the time, then that's when the rebuild is needed.