65amp wiring/trouble shooting

I agree with locating and repairing the problem FIRST. That way, you know what's working and possibly what's not. Could be it was just a fluke of a wire rubbing against something through the years and finally got the insulation off and grounded, once repaired, it may never do it again. It all depends on what you want to do with the car. If you're like me and the most you're going to do with the electrical system is a small sound system and electronic ignition, the stock electrical system will be fine, if it's in good shape. Adding electric fans, a lot of tunes and whatnot and you will probably want to make changes like the amp gauge bypass. But unless you repair what's there first, you may end up repeating the problem. That would suck.
The question now is how to repair this cable. Do I need a completely new cable or is it enough to repair it? And if it is good enough to repair, how? I mean, the insulation melted away a bit. Is it enough to take some insulation tape? Or is it also possible to cut off the melted part and add a new crimp connection? The only part that melted is where it is screwed down on the ammeter, as shown on the very first picture.