Colin.
Let's make this a wee bit easier. We'll call the switch on top of the starter that's actuated by the start lever the Start Switch.
The Start Switch is just that. A switch. Electricity will flow either direction thru it. So it makes no difference which wire is on which terminal on the Start Switch.It connects both ways.
The purpose of the Start Switch is to supply voltage to the solenoid. The solenoid is also also a switch.( A heavy duty switch ) But it is actuated by electricity passing thru the Starter Switch to the coil in the solenoid. The small terminal on the solenoid is where one of the wires from the Start Switch must go. This small terminal is one side of the coil built into the solenoid. By applying power to the coil, it becomes an electromagnet which lifts the internal plunger that has contacts on it. These contacts close the circuit from your battery to your starter motor.
Now you need positive power to the other terminal on the Start Switch. This can be picked up anywhere it is available. The schematic shows it coming from the Manifold Heater Switch switch. But you could pick it up from the positive side of the key switch, heater button, horn button or even the large terminal on the solenoid that has your battery power connected to it.
So in short. Positive power flows thru the Start Switch to the solenoid coil. Which in turn closes the internal switch connecting the battery to the starter motor. Tractor starts
Sounds like your original connection might have been a short circuit. Which would explain why the wire got so hot.
Hope this isn't too confusing
Bill
the heater switch
