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The main ground wire from your battery the engine case is stuffed. Replace it. The black wire for your stator is melting because the current for your starter is going thought it, as it is now the main ground connection.

Get a small bit of valve lapping compound on the tip of your screwdriver, it will grip the head and the screw will come right out. Give that a go before you try grinding/ drilling. Sent from my GT-I9505 using Tapatalk 4

The additional red and purple wires are used to power the cdi on 03 and earlier kawi's, you dont need them as your cdi is powered from the battery. Just cap and stow them.

The cdi gets power directly from the charge coil in the stator, so it is very important that you have a good battery so that while cranking you have sufficient rpm to generate the required voltage for the cdi. A good battery is always required for one of these systems. If you are still having...