Sources for Chrysler type wire terminals
Good points. It also looks like that might be a double wide terminal. I don't know if the insulation has to to be butted up but that's a good way to make sure its far enough up. The conductor looks pretty unoxidiized. If the insulation still has some softeness I wouldn't worry about the color damage. Making the wire too short and it will then be strained.
There's some posts about making crimps. I'm to tired to search them out right now.
If you want a good connector, look in the for sale or place a wanted ad. Pretty sure thats how I got an undamaged replacement for my '67.
A good way to take the load off the headlights is to make (or buy) a relay harness. It also takes the headlight load off of the alternator output wiring.