I notice that headlight and tail light stay on while trying to start. Is this normal? Should I be fitting a toggle switch on top of the headlight to reduce the load on the battery during start-up?

Would you view the modification as worth while?  If it was your bike would you modify the lighting system?

Until you have it running you should not fix another problem.
You don't need to risk creating one. Start messing around with the wiring and you can't start it. Where is the problem? Is it the problem that you have been wrestling?
Or did you accidentally create one somewhere else? Don't even ask me how I learned that.