Not to be hyper-critical, but your wiring needs to be brought up to snuff. What's shown there is pretty atrocious.
Bare wire strands held down by screws are unacceptable technique, and you can see why. Buy some good quality spade connectors and proper crimp tools, crimp them on and install them under the flat metal "covers" on the tabs.
There are also a bunch of other wires that I can see that need help...bare conductors showing, no strain relief, etc. Several appear to be breaking already.
And yes, that's a radio noise suppression condenser. It's got nothing to do with the generator and no effect on the VR, really. It was an optional thing to deal with noise on the radio from the charging system, along with on on the generator itself, one on the
coil (not the one IN the distributor), one on the
fuel tank sending unit (or all places), the springy things that were installed under the grease caps on the wheels, and hood bonding clips.
The proper voltage at various RPMs are listed in the
Ford Shop Manual. Before messing with adjusting the VR, fix your wires properly (both ends...you probably have similar issues at the generator end, etc.), *CLEAN THE CONNECTIONS* thoroughly, and then see what you have.
