Are both front brake arms supposed to move when I pull the lever (or just one)?
My set-screw on the clutch side is galled and useless, any suggestions? Bigger set-screw?
Any referrals to a repair manual?
Yes, both arms are supposed to move. But the rear arm should move first, and the front arm only after the rear arm has caused the brake shoe to contact the drum. This is the purpose of having two different springs on the shoes inside, and having the adjustable cam to set the front arm's shoe's resting position. You should get a very progressive and, for its era, strong braking force.