It was going to be very hard to explain your boat’s wiring set up without pictures, so I was very happy to find this website that did it for me! This is only the DC (12volt) system, but it does a very good job of showing the various components necessary for safety.
Although it claims to be all about wiring your boat, it leaves out the actual wires. Ever wondered why there are so many different sizes of wiring on your boat? Using the smallest wiring appropriate for the task reduces loss of energy and transfer of heat. The amperage, which is basically how much energy you expect to flow through the wire at the time, and the distance, determine the actual size of the wire. Wires are sized oddly: the bigger the gauge, the smaller the diameter. If you are installing new equipment, the equipment itself may well tell you the ideal wire gauge. Otherwise, you will need to look up the amp draw of the equipment and cross reference that with your distance. West Marine actually posts a handy table where they sell the wires.
As for the rainbow of colors of wiring, well they are manufactured that way to allow you to color code the whole system, so that you can tell at a glance which system a wire will run to. In reality, unless you are particularly fastidious, at some point, you will grab the wire that is available to you, double check the gauge, and 20 years later some poor fool is left trying to figure out why one green wire is used as a positive in the DC system while all the other green wires are grounds for the AC system. And that is where this poor fool has come up with the term “previous idiot” when referring to work done on the boat.
Marine grade wiring is stranded (lots of little wires creating a cable, rather than one wire). This allows for you to run the wiring through those odd contours of your boat. Solid wiring is prone to breakage if you make too tight a turn or pull too hard, or bang the wire against the bulkhead with each pounding wave in a storm. Stranded wire is more flexible, and also means that if one strand breaks, the others can still carry the load.
Marine grade wire is also tinned. This means that your individual strands may look tinny, rather than coppery. This is to protect the copper wire itself from the corrosive marine environment. If you find that your boat has untinned wiring, you may notices that a black substance has built up on the wires, or the wires may even be corroded through. In such cases, the wires should be trimmed back. If there are still signs of corrosion a few inches back, the wires should be replaced.
Marine grade wiring should be connected with crimping and waterproofing. Soldering is not appropriate. Your boat is a mover and a shaker, but solder is fragile. If anyone insists that you should solder, you have my permission to have them walk the plank. Wing nuts are not appropriate. They can trap moisture in the connection and create all kinds of issues. Crimp and waterproof. I prefer to buy the the connectors that come with heat shrink, but we also carry all sizes of heat shrink tubing in our electrical tool kit. Be sure not to confuse the built in heat shrink with the nylon covers. Ancor sells both, but as you can imagine, the nylon does not shrink and it does not smell good when you apply heat. Most jobs on the boat we either naturally fall into or we fight over whose turn it is to suffer through. But when it comes to wiring, we both find a high level of satisfaction in the process of stripping, crimping and shrinking a good connection!