I'll make an attempt - although I have to confess - electrical stuff is sort of mystical to me. Q1. - I would take that to be the inner fender mounted junction block. Q2. & Q3. - With the alternator stationary the terminal for the alt. lamp is a ground to complete a circuit for the lamp. With the alternator charging that terminal becomes + -- thereby bringing + to both side of the lamp -- no ground --no lamp. Q4. - I've no answer for that one--one of the mysteries of life? Q5 No. Here's where I get fuzzy about electrics. The starter doesn't "withstand" amperage--it draws amperage when in use. An old fashioned inductive amperage tester will show you that (come by my place and I'll show you). When cranking a good starter may draw a few hundred amps. A bad starter may draw 5 or 6 hundred amps. Is your starter catching fire? Maybe a short in the starter itself? If you need one -- I have plenty.
Hope I didn't write anything to confuse you. -- Dave