As the sidevalve engine really has a low compression, the lowest grade of octane is sufficient. It'll be ok with some 70-80 octane. Some people that I know do blend some 10% kerosene or diesel in the regular 95 octane that is sold over here and they swear that the engine runs smoother and better.
The magneto is "hot" has really 2-3 meanings. One is slang for simply when it can produce a spark. Or "hot" as in "active" or "on". The mag can have a ground wire to the mag points and a button or swich for stopping the motor but that is not relying on any battery. The mag is working independently of all other electrical circuit.
On most of our 101 there's no button or switch to ground the points, so the mag is always "hot" and ready to give a spark. But on the Sport handlebar that came with one of my bikes, there was a second horn button placed on the left handle that I assume is for grounding the magneto, and many Fours where equipped with Sport bars.
The Indian Four doesn't have a valve lifter as on our V-twins so they use a wire to short out the mag points in order to stop the motor, I really don't know if some or all models of Fours is stopped with a button on the handlebars or the switch on the instrument panel.
With battery ignition there must be a switch to disconnect the ignition coil, or the battery could be drained through the coil if the motor stops with the points in contact.
The magneto working temperature is "hot", really about 60+ deg celsius, not because there is some kind of bearing friction or anything, but because the magneto field is fluktuating very fast around the magneto and it makes the electrons in the material in the magneto vibrate, much like the regular microwave vibrate the molecules in water and heats up your meal.
