This chain is defenitely too slack and worn out, same with the front and rear sprockets. Replace all of it and you will have a totally different sound and more comfortable ride. If the chain is the original one from the 70's, they are also a poor quality. They did not match the power of many engines, especially the CB 750.
I would also advice you to replace it before the chain snaps off. If your bike is a CB 500, the clutch rod going from left side of engine right in front of the front sprocket and to the clutch house, will breake. Lot of damage to other part my happen, too. A friend of mine had to replace the reare fender, chain simply snapped and swung up and hit the fender. And your left leg is not far away...
Book says slack to be 1-2 cm or about max 3/4 inch checked at the lower chain in the middle between the two sprockets. I does not say if this is to be off the center stand and with rider on the seat, so i believe it is the reading on center stand. Other opinions on that?
Lars