his charge wire was correct, but something going on with one of the field wires that was back feeding through the ignition. All GM alternators are not alike. that one appears to be what i ran on the CJ and early buggy motor. one of the terminals jumps to the charge lug, the other is something for an idiot dash light. charge lug goes to batter side of the disco like you have it.
thing looks good and sounds good, couple tweaks and it will be good to go.
your cooling issues is either a gay AMC water jacket thing or a stuck shut thermostat. baffling but motor def has lot of air in it.