1. When a source citation is included with an illustration, the source citation is in 7-5 margins instead of being blocked in the 5th cell to the right of the beginning of the previous line. Does a source citation in 7-5 format still require a blank line following it or would it be considered part of the rest of the caption and not require the blank line?
2. When a book has an illustration such as the attachment shows, would I include the facsimile information shown in the "handbill" if the rest of the text doesn't refer to it? Is the caption enough? If the facsimile information is transcribed, would it be better to box it and attach the caption to the box, or would it be in a new paragraph and remain in the 7-5 format.
Section 6.2.2 (which talks about sources and illustrations) doesn't say anything about blank lines. As such, I went to Appendix C which says that blank lines follow source information - and it doesn't specify which type of source. So my answer, based on Appendix C, is yes, a blank line is required following the source.
The caption is good on this picture...but I would still include a TN that you are not including the information from the handbill. If there is any doubt that the information would be required for the reader, box it and attach the caption to the box. In this specific case, that might require the full cell outer box lines and individual boxes for the two types of information in print.