Mike, I've had dwell meters with three leads, and others with two. I suspect the reason is a tachometer function as well as dwell readings. It's been a while so had to think on this one.

As has been said already, a two wire setup hooks as described. My 3 wire caught both sides of the coil plus a ground.

I have to admit I've never tried adjusting dwell by just cranking the engine over. On rare occasions I've slightly elongated the adjustment slot with a rat tail file to obtain more travel. In any case I've always made the readings with the engine running. I'd be interested in other opinions on this.