Trouble shooting with the help of the Retro Bajaj Forum.
Replaced the spark plug resistor cap. Spark plug appears decent, but will replace as it's only a $2.00 test.
The big concern is the scraping sound the flywheel makes and the fact that bike will not fire up, as you will note in this video:
It appears that almost all of the flywheel rivets are missing from my wife's scooter as you can see in the video or the photos. I have been told I all I need to do is have the flywheel re-riveted. I suppose I could also have it welded so that never happens again.
The steps I will follow to repair the flywheel can be found here with pictures included.