[Tom Wesenberg]

The black wire from the terminal box supplies the voltage to the coil primary. The red wire runs from the coil primary through the switch and grounds at the points to complet the coil primary circuit.

I don't know of any coil where the metal can is connected to the coil primary circuit, and the coil mounting should not need to be grounded. You only need a feed wire and a ground wire to complete the coil primary circuit, and if either one is through the can, the points can't do their job.