Sounds like the mag does need to come off and be gone through.
It shouldn't be too difficult to get it off, but first bring the piston up to top center on compression stroke, mark the coupling on the mag.
Looks like the flywheel cover shroud needs to come off to allow the mag to move back to disengage. It should be obvious what it takes to get it off.
Once it's off you can either take it apart and try to repair it, or send it to a mag specialty shop, let them take care of it.
But usually they can be repaired with just some cleaning , lubing, and TLC. Sounds like there are 2 problems, the impulse mechanism needs cleaning, and the points need cleaning and setting. Both are typical problems encountered from long term storage.
If that doesn't get it sparking, it will need to go to a repair shop.
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