Mike, you're not looking for heat dissipation, to do so would defeat the purpose of the resistor. It should be mounted firmly as original though, so you don't burn your pinkies.
As I understand it, Generator pumping lots of juice, or batery almost dead with no generator, the resistor puts out about the same. Generator makes it glow red, putting up tons of resistance, and barely gets hot with a dead battery, allowing most of the voltage to pass through. The end result at the coil is supposed to be close to 4v.