"Which is better, a built up spar or a solid?"
It depends. A built up spar can be lighter, and just as strong if it's properly engineered. If you're building to plans or a kit, you should use what the designer intended, unless you're prepared to completely re-engineer it, and perform appropriate analysis.
"A lacquer finish, a spar varnish, or an epoxy varnish? Is a butyrate coating better then any latex paint?"
I can't help you on the varnish but a butyrate dope finish is probably "better"... but it will cost more and be more work. Some people have been happy with latex finishes, others have not.
"Finally, what type of engine is better, an aircraft quality or a standard gasoline engine?"
Again, it depends. For an ultralight, a certificated aircraft engine will be too heavy. Ultralights typically use 2-stroke engines which usually are less reliable than 4-stroke engines, but with proper attention they can be adequately reliable... and they weigh much less for the same amount of power.