L31MaxExpress
I'm Awesome
Yes that is correct. As you turn the housing the direction of rotation you are retarding it. Turning the distributor shaft counter clockwise will do more of the same.
One tooth refers to the number of teeth on the distributor gear. I don't know the exact amount but there are 12 or 14 teeth so you would rotate 1/12 or 1/14 (or one of however many teeth are on the distributor) of a rotation.
Pro tip: When you turn the distributor back one tooth turn the oil pump driveshaft the same amount. If you don't you may run your box of foul language empty before the distributor seats on the manifold.
I never touch the oil pump drive gear. Lay the distributor in there far enough for the distributor gear to engage the cam gear and bump the starter. The distributor will fall right into place when the oil pump shaft slot lines up with the distributor drive tang. Way easier than trying to fight it with a long flat blade screw driver.