There are two sets of holes.... one on the throttle arm, and one set on the governor arm. "Factory" setting on the governor arm is third from the bottom. On the throttle arm, it's wherever you need it to get the adjustment on the dash to your liking.
As far as tuning the carb, you set the initial setting and tune it from there. Every motor is different, so no, we can't help you. You have to figure it out and tune it to run in the best location. The engine service manual tells you where and how to set the governor spring location, how to reset the governor (which is you have not, you MUST set before start up) and how to tune a carb. You really need to read the book. The PDF file is in the Tech section, just say if you can't find it and we can post a link.
