Setting the timing is pretty straightforward - just line up the dots on the gears. Look at the cam gear and the crank gear and you will see a tiny little dot on each. The camshaft dot should be at the 6 o'clock position and the crankshaft dot at 12 o'clock such that they are pointing at each other.
Since your rockers are tightened down, you probably won't be able to turn the cam by hand. You can use the crankshaft to turn the cam by installing the timing chain and then rotate the crank by hand using a breaker bar or large ratchet and a 15/16" socket on the harmonic balancer bolt. Rotate the crankshaft until the cam dot is at 6 o'clock, the remove the timing chain. Now rotate just the crankshaft until the crank dot is at 12 o'clock. Reinstall the timing chain. The way I normally do this is to put the crank gear on the end of the crank snout, but don't push it all the way onto the crankshaft. Loop the timing chain around the crank gear and hold the cam gear inside the chain with the cam gear's dot at 6 o'clock. While holding the cam gear, push the crank gear onto the crankshaft keyway and slip the cam gear onto the camshaft and the dowel pin. Make sure the dots are lined up. If you are off a tooth, pull the chain and gear away from the engine just a bit so that you can shift the cam gear, then reinstall the gear. When the dots are lined up, install the cam gear bolts.
When you reinstall the distributor, you need to ensure that you are near top dead center of cylinder #1 on its compression stroke. This is when both the intake and exhaust valves are closed. The only way that I know of to determine this on an assembled engine is to pull a valve cover. You have a 50/50 shot at being right. If you don't want to pull a valve cover, you could just install the distributor. If the engine won't start and you hear it backfiring through the exhaust as you try to start it, that just means you are 180 out on the distributor. It's a quick fix and much faster than the trouble of pulling a valve cover.
You won't be able to fine tune the timing until you get the engine running. You'll need a timing light to do that once it's up and running.
As far as the cam dowel pin working loose, I don't hear about that happening often. The pin should not be loose in the cam. If it is, you'll need another pin. I believe it is a slight interference fit, so it shouldn't just slide in and out. A little Loctite on the cam side of the pin should not hurt anything, but should not be necessary. If the pin worked its way on by itself, I would replace the pin with a new one. Hopefully it's not due to an enlarged hole in the cam - that would probably require a cam replacement to fix.
