Hi there!

Nice diagram you have. You are quite the poster, I wish I was!

#1
It is the junction box on the inner fender panel. There are several circuits fed from here, not shown, except a clue is given by the fuse panel.

#2 and 3.
The light bulb recieved power fron the ignition switch and the other side of the bulb is grounded through the alternator windings. Going in arrow! The ignition switch keeps it from drawing down the battery when the engine is not running.

The current through that circuit "trickles" in and creates a small magnetic field in the rotor to excite a current flow after the alternator starts turning.

When the magnetic field rotates the magnetic lines slice through the outer stator windings, creating a current flow outwards. Going out arrow!

The current opposes the in-rush "trickle" and the bulb is no longer passing current to ground.

The light bulb is extinguished. I will add again it's only a trickle going out as well.

This is why the light will not give you a clue to how well or much the alternator is putting out!

As the magnetic field increases from the main stator winding part of it is fed back into the rotor by the voltage regulator.
This is when the alternator becomes a self sufficient output an operates by itself watching the voltage and adjusting current output according to any amount of voltage or current draw fluctuations.
The battery gets what it needs by being like a reservoir and absorber for the system.

Knowing the systems output voltage becomes the thing to watch with our voltmeters!

#4
That is the incoming side. That is called a tie bar or buss bar. The switch is controlling more than just that one set of circuits. It saves running a bunch more wires from the switch.

#5
The starter motor is protected by the solenoid switch and a alert driver, we hope!
The motor windings are grounded through the housing of the starter. Not shown on the schematic.

Consider that cable as one piece back to the battery from the alternator. The starter is an intermittent accessory!

When push comes to shove, a GOOD battery, will supply more current than the alternator at any given time. Like I said it is a reservoir and a system shock absorber!
Any battery is Quite Large, in electrical terms, with reserve power. Far MORE than the alternators, even when it's at full rotational speed, it will lose against the battery capabilities!

I have heard an alternator temporarily scream at full output and the battery, it just sits there!
But if you kept that up, it might "crack" a big ole' smile! (:-( you, not so much! (:-)

It's not uncommon to see many hundreds of amps jump out of a battery, momentarily!
It's the amount of time IN USE that can keep your wires from burning up or even your starter!

That's why you want to limit any cranking time as much as you can!

Keep the cars ignition system and electrical connections tuned up! Is saves a whole bunch of wear and tear on several car parts!

Hope this helps you and a few more out there.

Phil