On your stock key switch, power from the battery through a 20 amp fuse to the red wire on the key switch. The brown is power out to most eveything on the bike. The blue is power to the tail light.
Where the instructions say "hook the red and brown wires to the same terminal" are the red wire feeding power to the ignition, should be through a 7.5 amp fuse, and the brown wire to the reg/rec. These wires get hooked to the brown wire from the key switch.
I assume you have the 80-84 stock TCI ignition system. On the TCI you need to have power to the red/white at te TCI box as well as at the coil. Power flows to the coil on the r/w wire, from the coil to the TCI box on the orange wire. The TCI grounds the orange wire to control sparek.
On your grounds, if you are using the frame as a ground path you need clean bare metal ti clean bare metal connections. Any paint or powder coat stop poweer flow.
The TCI also uses the pick ups on the stator to read the magnet mounted in the rotor. As the magnat passes the pick ups a signal is sent to the TCI box that tells the TCI box when to fire the plugs.
If any of these things mentioned are not right, no spark. Check all your connections. Use your multimeter to check for voltage at all the componetents along the path from the battery to the coil and TCI box.
As you check for these things you can leave the plug on the reg/rec unplugged. You won't need it for checking for spark. Once you find spark you can plug the reg/rec back in.
Leo