All Questions are Good, so don't worry about that . . . it's the Answers you have to be wary of sometimes!
The cable in your pic operates the manual advance and retard for the magneto and is normally on the left hand side of the 'bars.
The magneto is at full advance when the cable is slack - which is where it should be in normal running. You want to pull it maybe half-way tight to retard the sparks for starting, and there are those who like to fiddle with it when running under load, uphill, at low rpm etc to try to optimise the running state of the motor.
If you pull the lever to full retard when running along, the motor will sound very flat and may belch at you. It might even stop, especially if the magneto is getting tired. The fully retarded tight-wire position is in 99% of cases quite unnecessary as long as the timing has been set reasonably close to where it should be.
I think most people leave the lever fully advanced - ie slack - almost all the time when the bike's up and running, but maybe use a bit of retard at tickover.
It's a 'sound and feel thing' that you get used to as you do more with the beast.
The choke (air-slide) control lever would be on the right hand side of the 'bars (if there's one fitted). Pulled taut is 'off' as you say - when slack the slide is lowered to reduce the air going through the carb so makes the mixture richer. Only used, if at all, for cold starts. Otherwise, tight cable at all times and should not need touching after a minute or two's running from stone cold. Opinions vary (I'm agnostic) as to whether there's any need for the air slide anyway, given the ease of starting by 'tickling' the carb.
The plastic or bakelite cover on the magneto (on the drive side of the engine), which has a plastic acorn nut on the cranked bit, would normally have a wire off it connected to a button to stop the engine and be arranged so the wire went broadly upwards and then along the frame to a horn-push type button on the 'bars. (Just in case you were wondering what it was supposed to be doing sitting there all askew!)