Do you have the head on & running with a thin B20 headgasket?

"Would you shave the head to B20E specs?"

Not if you already have it on & running. For high compression you must have stellite exhaust seat + B20E valves or better.

What is your ultimate goal? It's not worth doing anything to the head now if you are aiming to go to a bigger motor it the future.

As for current lack of grunt, that is partially compression, but mostly the big intake valve.

Cam timing: The K cam is single pattern & symeterical. Put the crank pulley to TDC & you should have both valves open the same amount on the cylinder which is in the overlap phase.(1 or 4). This is straight up timing. Ideally you would want to see the inlet open slightly further, which would indicate the cam is advanced. If it's retarded, you will loose grunt for no gain.

Lash: The old cams have long lash ramps which allow you to vary the clearence a lot. I would leave the exhaust @.018-.020", widen the inlets to .022"

Ignition Timing: with your lack of compression ratio, you can have the advance come in as fast as possible. Loosen the thick spring so it never comes in, then loosen the thin spring until it lets the advance start at 1000rpm.

Have you actually looked inside the distributor, cleaned it all out, checked the clearences & lubed it?