Borrowed a pressure gauge from the parts store and checked the running pressure. Even with the somewhat questionable accuracy of the gauge it never dropped below 50 psi. I ran the RPMs up and it held pretty steady. Looks like the regulator is working as needed.
I did find my NGK plugs are shorter than the Bosch plugs. There was spark jumping across the space between the plug socket and the spark plug tip. In doing so it was jumping to the socket to the engine. Installed the Bosch plugs and no more arcing. Now to replace the rear tire with a nail in it, change the fluids and start loading her up.
To get accurate fuel-pressure system checks (and regulator check) you need do to a bit more than above...
(1) Assuming gauge is fairly accurate, you should get close to 50 PSI in any tests below. In case of having no other gauge to compare accuracy, I would tolerate values +/-10% above/below IF-AND-ONLY-IF the engine behavior is always good in all running RPM (including cold-start and high RPM acceleration).
(2) As a first test: engine off, gauge should be connected to a "T" at quick-connector on the pressure side hose (most inside hose at bottom of fuel-pump flange). Turn ignition ON, do NOT start. Check fuel pressure reading after 6 seconds: should be between 45-50 PSI - this is the prime fuel system pressure. Turn ignition OFF.
(3) Wait another 2 minutes and note IF gauge reading is losing pressure compare to the earlier priming pressure. It is a close-system and should maintain pressure for many minutes.
(4) Do same pressure reading test as above with engine running at various RPM (engine cold and hot). Of course, as it is nearly impossible to ride with this gauge installed, you have to limit the kind of RPM you can test in garage with fuel-pressure gauge connected.
(5) Shut Engine OFF, but leave pressure gauge connected. Come back for more readings every 2 minutes for about 5 times. Note how much pressure system is losing with engine OFF over time. It should not drop below 42 PSI after a 10 minutes delay.
A drop of pressure with engine stopped (test 2-3 OR in last test) could be caused by a bad fuel-pressure regulator OR a leaking/stuck fuel injectors OR a cracked/leaking fuel-hose inside tank.
ATTENTION: do NOT ever turn ignition ON or attempt to start engine UNLESS both hoses are fully connected under fuel tank (both quick fuel connectors). You need a path for the returning fuel supply from regulator (at fuel-rail), otherwise the system is being over pressurized until the over-pressure valve at fuel-pump opens up as an emergency path (assuming it does function).