Cam at 6, crank at 12. This will leave the engine at TDC compression #6...so remember to set to 8-12 BTDC compression #1 before dropping the distributor in. Most common reason for new engines not starting.
The
C3001K is fine for a stock replacement. Double roller cams are engines making over 1 HP/CID at the wheels. Shouldn't have to grind on anything. I am a fan of putting on bolt retainers, but honestly it's not really needed. Just cheap insurance for engines that are probably going to be running for a long time. You don't need a cam button.
The Dorman stuff is fine for a stock engine. The
594-012 one is fine - the "S" for the street version just means it has some high performance features like scribed on degree marks.
Water pump is kinda up to you as a 'while I'm in there' thing...
I don't know what "re-align" means, but yes - you want to verify TDC with a piston stop, make sure the mark on the balancer and your timing tab are right, and then set the timing