Interesting. What does the plate on the generator say? A quick look and it appears like a home made set up. However looking at this old advert I found online it seems t be genuine.
SAE 30 or 40 engine oil eg Castrol XL. Morris Oils do old style engine oils eg Golden Film SAE 30. Old two stroke engines just had normal 4 stroke engine oil added to the petrol, special two stroke oils for mixing are a relatively modern idea I believe.
The only option I have seen for UK models is the large pepper pot, which I have on my model 35. The big model 90 did have an exhaust and silencer mounted alongside fuel tank and I have seen photos of model 60 with exhaust across the front.
I am not familiar with this particular model but have heard a similar sound on machines that have a centrifugal clutch. The noise is caused by clutch mechanism.
Various fuel additives are available such as Castrol Valvemaster which is a lead replacement additive.
A good question and one that has been asked before. The answer is yes it is still classed as pedestrian operated, same as Barford Atom with trailer etc.