Few Questions and a Story

First, the questions as the story will take awhile for those that want to read it.

#1. Where does the wire in the middle go? It popped out while i was taking out the switches and I didn't see it pop out so I have no clue as to where it goes. Did it come from the top plug or the bottom plug?
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#2. What is the piece called that is cracked? I've been looking and I can't find any place that sells them.
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#3. Here is the somewhat scary part. How hard will it be to fix this rust? It's not a question of getting another car because it's to bad either, getting another car is not an option.(Read the story for an explanation as to why.) I'm not afraid of doing a ton of work either so if it's just going to be time consuming that's no big deal.
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Now the story.
My mom bought it new from the dealer in 88' which makes me the second owner. This car was my moms baby, she cleaned the engine with a toothbrush, changed the oil religiously,always either had Pirelli or Gatorback tires on it, and drove it how it was meant to be driven. I remember begging mom to floor it on the interstates when I could barely see over the dashboard. My dad died when I was thirteen months old so it was her job as a single mother to raise me. Not to long after he died my mother was found to have Rocky mountain spotted fever and Lyme's disease. Not being able to do her old office job anymore she had to get a job in town so she could spend time raising me since my dad was gone. It came down to the fact she couldn't maintain her mustang anymore and inherited my great grandfathers cavalier when he died. It was an easier mode of transportation because of gas prices, etc. She hated having to do it but the top had ripped during the winter and was missing a bolt on the top frame right at the drivers window which was going to be a costly fix for her. Not being able to afford the repairs the mustang was, sadly, forced to sit in the weeds and age away for 6+ years. Now I've grown up and miss the times riding in the mustang with the top down just cruising. The mustang came into my possesion two years ago after I begged my mother to let me buy it from her. She realized I wanted to revive the car, I wasn't a kid who wanted a "fast race car" I wanted the car to look how I rememberd it and drive better than it did then. Before I bought it from her we did an experiment. We took a truck down to where it was sitting and threw the truck battery in it and tried to crank it....it tried to crank. After more than 6 years the car had the will to live. I immediatley changed the oil and ran new battery cables (field mice ) I got my mom down there and let her do the honors of trying to start it for the second time. My mom put the key in and looked at me and said " You know, they all said it would never run again." I just smiled at her and she turned the key and without any hesitation "James", as my mother named him on the way home in 88', fired up and idled as if I had just overhauled the engine. It's ben ongoing ever since. The second I heard the unmistakable rumble from my childhood and saw my mother tear up I knew what I was going to do. No matter what it took James would be his old self again. So here I am. James runs, won't pass emissions, still needs body work finished (To cold to do any work right now and I don't have a garage.),needs a new top, and a few odds and ends but I'm working on it. Oh, by the way, I was taking out the dash today to replace the heater core and stumbled across the old owners manual, stereo brochure, a few other brochures from Ford and low and behold the original window sticker. They had fallen behind the glove box. So now those of you that took the time to read this understand why I'm willing to do what it takes to fix all the problems. I'll try to find one of the old pictures in the future and put it up when I make enough progress to start a good build thread. Thanks for reading and I hope you enjoyed the story.

Thanks for the comments guys. Thanks for the info on the fog lamp switch goodfastncheap.I thought the rust looked fixable because it seems like just really bad surface rust there arent really any pits. Yes, I'll be pulling the engine. I want to give it a good going over when I do the bay. I'll try to get some sort of a structure to house the engine while I work on the bay come spring once the weather gets warmer. I'll have a good game plan formulated by then on parts and how I want to go about everything. I've got some interesting ideas on what I want to do to the interior for sound deadening. Now I've just got to get it stripped down so I can be ready come spring.