smashed spark plug is usually caused from a chipped piston. aka time for another engine. that smashed plug looks kinda new too. im thinking the last owner knew this already, why he sold it. do a compression test on that cylinder.
what year make model?
what gas are your running?
a clogged cat will also cause the cel to flash and feel power less. if its clogged solid it can keep it from running like a potato stuffed in a tail pipe.