In your close up of the shock, that's the "softest" spring setting. as you rotate the ring, the taller the step your on, the stiffer the spring will get. As far as it goes with a shock like that, set it so that you use up about 1/4 of your travel when your sitting in it. (preload setting).
One of the best improvements you can make is to step up to a better set of shocks. finding the right length usually isn't that hard, but finding the correct spring rate can be a pain. It varies for everyone based on weight, riding style, power output and terrain.
I run a TT Vapor. buried in my thread somewhere are pics of the mount setup i made.
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