Your Valve Seats Are Scarred and Damaged
This is your biggest issue.
Your valve seals the combustion chamber on the valves face and the valve seat. The valve seat is in your combustion chamber. You can see the cleaner line where the valve face hits the seat when the engine is running. This seat needs to be perfect and the dings in the seat may be too deep to cut away, it's hard to tell in the photo. If you can cut new seats into them you will need some tools and patience and probably a few questions will need to be answered.
On the surface, you can press them out of the head and get new ones inserted or you can cut the current seats back into shape and see if that will 'make it better'. Getting the old ones pressed out will probably need to be done by a machine shop. Re-cutting the current seats will require a valve seat cutter and guide pin.
You would cut in new seats and lap in new valves with valve lapping compound once the seats are re-cut. The entire process is too much to write here.
See here for various valve seat cutters to get an idea.
Your engine is a pretty low RPM low compression engine in the grand scheme of things. This is good as a higher compression engine would need to have this head thrown in the trash. You need to get any sharp edges sanded down. You don't use a hone for this kind of work. A hone is for the ID of a cylinder. Use 120 grit wet/dry sandpaper and a wire brush on the end of a drill. Put an old sparkplug in to protect the threads inside the sparkplug hole. You'll throw it away when your done so use an old one. Just ensure there are no sharp edges that can get overly hot during engine operation and start to glow, this will cause predetonation and require you to disassemble and find the 'hot spot' in your combustion chamber if you don't do the job right the first time.