First, are you checking the timing with the engine completely warmed up? If not, this can affect how the timing is read from a light. There are other variables such as timing chain wear, slop between the distributor and camshaft gears. You also need to know that "some" bounce is normal. In an engine with a lumpy camshaft, sometimes you get a little movement that goes along with the camshaft lope. No big deal. None of them are rock solid, unless you have a gear drive.
Problem #2 is that you have the vacuum advance connected to manifold vacuum.......which you CAN do and tune for, but FOR NOW, get it on a ported source. Ported vacuum has zero vacuum at idle and increases as the throttle is opened. Lastly, your idle should be about 650 "or so".