72 360 first start question

With all the backfires, it seems like the spark is ending up in the wrong cylinders; a lot of what people are saying is to get the rotor lined pointing right at the correct spark tower. The OP's procedure sounds a bit too inaccurate for being sure of doing that.

Also, check the rotor and cap to make sure that they are clean and not hitting anywhere inside the cap.

Not much worry for the fire to go back through the fuel line.... you need fuel AND air to have a fire. You don't have air in the fuel line. But have a CO2 fire extinguisher around; you DON'T want to use a dry chemical extinguisher on your new engine and get any of the 'stuff' inside.