Yes, that's a much better advance curve, you should have the whole 36deg on by 3500rpm. The K motors will take more advance than that, its just a matter of what fuel you can buy and how much advance you can give it before it starts to lose power or knock.
The plug colours are interesting, I don't know why they are in piston pairs like that. I wonder if 2 and 3 have an inlet air leak around the exhaust port in the middle and are running lean? Check the bolt tightness along the manifolds just in case.
Is there one of those air pump/pollution lines run into the inlet manifold in the middle?
Otherwise it is a richness problem with 1 and 4, even harder to explain! maybe a misfire on 1 and 4 is making them black.