Light Green wire is from the FLD terminal on the VR to one of the FLD terminals on the alt. Brown wire is GRD from the VR bolted to the body to the other FLD terminal (2 field alt, but with the older style 1 field mechanical VR).
That alternator in the photo is a much newer replacement. So the question is why did the fusible link melt? Either the rotor drew too much current, or the circuit feeding it (wires + connectors + brush) shorted. You can check for a short at the brush visually and/or with an ohm meter. You can also check for grounding of the field (feed) brush with an ohm meter. If the short is not in the alternator, then it was in the wiring.
I do have a service manual and was just comparing the wiring diagram in it to the one I shared above. The wiring diagram in the book shows that dark blue wire connecting between the VR and the starter ignition switch and not touching the fuse box... ?
That's the typical arrangement for cars of this era. It's not fused for various reasons. But it seems that in '66 the A100 had a different approach. However I can't make out enough detail in the '66 diagram to figure out some things, and since you have '68 then that's what you need to work with.
How the alternator works is pretty simple. Explained in here.
Roundback and Squareback refer to the style of housing. Roundback through model year 1969. Roundback for model years 1970-71 usually has a slightly different rear housing Squareback Revised Squareback Is most easily differentiated by the thin middle between the housings. Overall these...
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In the master technicians conference, Chrysler recommends that techs trace (or redraw) with colored pencils the circuit of interest in the wiring diagram.
The you can turn it into a simple diagram or schematic to see how its supposed to work. For exampe for a standard '66 A-body the main circuits to run the car:
67 and 68 are the same except power to the horn relay was connected at the alternator.
With the key in run and engine running electrons flows from the alternator to the welded junction (usually hidden inthe harness) and then to whatever is calling for power. After starting, the ammeter should show charging. After that it should show zero, as the battery is neither charging or discharging.
Master Technician Service Conference - Chrysler's Training for Mechanics The on-line Imperial Club has the best index of the Tech Conference.
www.mymopar.com for scanned service manuals, parts books, and Master Tech conference in pdf and youtube formats.
The 1970 Hamtramck Registry Library Page Has Service Bulletins (updates to the parts and service books) and Sales Information