The engine should run even if the plug is a little further up than optimal.
Seeing as you have fuel running out of your engine, it's probably a problem with the carb. Open the float bowl(the bottom of the stock carb) and make sure the brass jet is properly screwed in. Also make sure the throttle cable, slide, and needle are connected up properly.
If that doesn't work, then you might be having a problem with your spark plug. Go to an auto parts store and get an NGK B6HS spark plug and a spark plug wire. You might as well buy those since you'll likely end up replacing the stock ones anyway. Either one may be faulty.