Can a faulty tach cause issue with a 7Al ignition or does a fault 7Al cause problems with the tach. It jumps around all over the dial. Second question: While checking the wiring today, I found that the poistive lead to the two step was about to fall out of a splice. Can this cause an issue with the way it performs?

Yes, Yes, and Yes.

In my case, had the same issue with tach bounce. What i thought was a clean and tight connection to the tach terminal on the box was not.