It's stayed where I left it. So I normally run it on my marked line at 7/16 or just a tiny bit forward towards 1/2". What I should do next (maybe this weekend since my wife is out...) is to carry an infrared thermometer and measure the effect on temperature. My pipes are VERY blue.
Last year I took a Maplin radiant heat thermometer on a run.
When I stopped, it measured 160C on the barrel opposite to the exhaust, and 220C close to the exhaust. No wonder that they say side valve engines can go egg shaped when hot! Timing would have been 7/16inch. This was in a car park after a long hill climb (probably at Newlands Corner but I can't remember now). It's not easy to do two trials under identical conditions...
I've no idea about chain stretch. I use rear chain spray lube on mine and it's stayed there for the 2000-odd miles it's done since I last re-sprayed it and timing hasn't moved a bit.
Incidentally - check Simon Grigson's 'Norton Singles' site for an article on tuning side valves for speed!
On 'tuning' - the main reason I don't run flat out on a good enough road is mostly fear (although I like to call it "mechanical sympathy"). I assume that since the performance improvements relate to improving gas flow, they aren't worth doing unless you are already running on full bore and are not satisfied that you are doing enough damage to your bike! Which is why the cheapest and probably most effective tuning device that I have is a set of ear plugs.
Having said that - encouraging it to run cooler has to be a good thing. I'm leaving well alone. No gas flowing anyway.