1977 KZ650 wiring issue

So I picked up this old craigslist find and have been working trying to get it to run. I took the carbs off and cleaned them all out, while out I got the bike to kick start with just some starting fluid (wanted to make sure the engine wasn't seized) and it did meaning I had spark. Few weeks later I put the carbs back on and go to kick start it again as the button for the electric start is missing so I can't use it. Nothing is happening as the battery has finally died either from a short, the key left on or cycled, or trying to kick it a bunch drawing power for spark. Took my buddy's battery and we did the big no no, hooked it up backwards, I melted a butt connector coming from the negative terminal end to the main harness. I replaced that and we took his battery and hooked it back up proper way, again I started melting wires close to the battery terminal ends. Note this whole time not a single fuse has blown but the battery keeps arcing when we were hooking his up to it meaning that despite the run/stop being off and key off theres power flowing somehow. I pulled the reg off and the points move freely still. I am stuck and looking for some ideas.

Disconnect the rectifier and try connecting the battery with the ignition switch turned off. If that solves your sparking-at-the-battery issue, then you need a new rectifier. (A shorted rectifier won't blow fuses since it's connected directly to the battery.)

Update: was in the process of removing the rectifier, and the ground and power wires are melted together it seems where they plug into the main harness, which would be causing the short and causing some heat. I just don’t know if that also is linked to now the battery arcing when the ignition is all set to off.