Chris,
If you look at the brackets on the frame that carry the stand, you will see that they are made of plate and folded at 90 degrees. The spacer is there to make sure the stand operates correctly without fouling on the radius of this fold. From memory, the stand should be fitted with the spacer on the offside of the machine, between the stand and it's mounting bracket (to make sure the stand locates correctly in the retaining clip). The nearside pivot bolt has no spacer, thus making allowance for any discrepancy in the widths of the frame or stand. Both pivot bolts should be tightened in the frame brackets so that the stand pivots on the bolts rather than the bolts turning in the frame.
With regard to the prong on the stand - this is fitted to the nearside as most Dragonflies were intended for the home market, and it is normal practice to stand kerbside of the machine to lift it onto it's stand. It's a lot easier to steady the bike if you are standing down camber with the bike leaning towards you than to have it lean away from you and take you completely off balance.
Regards,
Eddie.