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On the first question, it doesn't matter which side of the firewall solenoid the cables are on, but I like the battery cable on the fender side for ease of hooking up a battery charger or jumping the battery, since my battery is buried under the fender on the right side.
On the second question, if you wire the starter cable to the bottom lug of the starter-mounted solenoid and bypass that solenoid, the starter will run but will not engage. When the solenoid energizes it does two things: it flings the starter gear out of the housing so it engages the flywheel, and it makes contact between the starter cable and the starter motor. I wired the cable to the top lug, and had the solenoid trigger wire to the same terminal, so when the cable got voltage (from the firewall-mounted solenoid), the starter solenoid was energized, thereby engaging the bendix and the flywheel and completing the connection to the starter motor.
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Ken
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