1994 Dodge Shadow poor accelleration, sparks at distributor

I have a 1994 dodge shadow. It appears to have some sort of electrical problem. When it first started, the car would go about 8 city blocks without a problem. Threaten to stall, loose all acceleration and jerk around for about another 8 blocks and then improve a great deal. Now the problem more spread out (rarely threatens to stall, but big loss of accelleration).

I have noticed when it does this (misses") there is a spark just under the distributor cap. Where exactly is hard to tell. When I look at it in the light, there does not seem to be a place for it to spark It is hard to tell in the dark. Someone told me to replace the spark plugs (they said the distributor cap looked fine)

Is this the right approach?

Now they are saying I should replace the spark plugs.