About engines running smoother with the heavy magneto flywheel, well... yes and maybe. Yes it does smooth out power delivery in the sense that the added angular momentum does smooth out the power pulses of these singles. This may be more evident in a road vehicle, where the driver may feel the propulsion produced directly by the crankshaft. In an airplane application, however, the thrust is generated indirectly through the propeller, so I doubt the effect is felt at all.

The other facet of smoothness is in regards to the vibration generated by the inherent imbalance of the single cyl engine. Though some have claimed an external flywheel purposely off-balance to counteract single cyl's primary imbalance can actually reduce the "felt" vibration, I have yet to see a convincing case of it. It might improve things at some RPM ranges, but it cannot possibly smooth these thumpers out overall.

Most of the smoothness gained with the electronic ignition conversion is because of the automatic timing advance.