Here's an old thread that addresses the issue of oversized downtubes and what others have done to mount engines to it > http://motorbicycling.com/showthread.php?t=6427
As for your oil choice, Stihl is a good oil. Mix it as per the manufacturer's instructions. Ignore the kit instructions that tell you to use a 16:1 ratio. That's too much oil. 24 or 32:1 is a better choice.
Many will tell you to replace the kit fasteners but it isn't absolutely necessary. Save your money and buy a torque wrench instead and don't overtighten the kit hardware and you'll be just fine. Most fastener problems are caused by over tightening and breaking the fasteners.
The weakest link in your kit is the spark plug boot. Throw it in the trash and replace it with a good automotive quality item. The high voltage lead (spark plug wire) that comes with the kit is okay to use but they are often short and restrict where you can mount the CDI.
Do not rely on the plug-in bullet connectors on the blue and black ignition wires. They can be a source of poor electrical connections. Strip the wires and solder those connections and protect them with heat shrink tubing.