With the engine, clutch and chain installed, the chain can be adjusted by making minor adjustments to the placement of the engine. If the engine is moved all the way forward, the chain will be too loose and could come off the sprocket. If it is moved all the way to the rear, it will be too tight and could break. A loose chain is a hazard, so either of these situations is to be avoided. Position the engine so that the chain has good tension, but is not overly tight.
I agree to use sring/lock washers. Not that Locktight isn't a good product, it is a bit too permanent for me.