The long cable is for routing along the front clip. A lot of the fox III guys who do a 3G retrofit run the cable from the alt to the passenger fender, then in front of the radiator, around the battery and to the solenoid (or the underhood fusebox in our case).
I chose to simply parallel the OEM cable because honestly it was cheaper (I make my own cables from bulk parts).
I left the OEM cable physically in the car but it is disconnected at both ends. If my new cable broke (a terminal came off, etc), I could do a roadside swap to the OEM cable if I had to. Otherwise, that stock cable is a real piece of crap.
In theory you want the fuse close to the alternator, though it's not super critical. I'd rather have the fuse holder someplace safe and away from heat. That said, I have mine mounted to the coil's bracket, which gets toasty.
Random thoughts. Good luck.