Okay, what wasn't clear to me, is that just going to the settings page and saving will create the ai_external.js page automatically from the template, with the required settings in there.
I think there is a lot of detail in the instructions that can confuse things. To have your iframe, containing content from another domain, automatically resize to the content it shows, there are two steps:
1. Go to the settings page for this plugin. Save the settings.
With all things being equal, that's it, just those two steps.
There are some conditions that need to be considered, but only if the above doesn't work. Making sure http/https is consistent across the WP site and the iframe site, is one condition. What happens if the settings page does not have write permission to the JS folder (and it really shouldn't for good security reasons, but did on my client's site)? No idea. But honestly, worry about all that once you have followed step 1 and step 2 and find it still doesn't work.