[geezer#99]

That's a newer motor.
That thing on the thermo housing is a thermal vacuum switch. Used to supply vacuum to things like your vac advance, your heat riser or your lockup switch on your tranny.
It doesn't hurt anything like it is.
I see you have your vac advance pot hooked up to a manifold vac port on your carb. THat's good.

I do see small gauge wires on your hei distributor. You'll need to check their size and source. You need 12 gauge wire from a full time 12v source. Either the ignition switch or an unfused barb on the fuse box. If your wire to the bat connection on the cap is yellow or has braided covering, you'll need to replace it. The braided cover line is a resistance wire used for points only.