battery warning light not working

Hi

I have a mk1 gti 1600. And yesterday the  battery died happened once before all was fine then the rev counter acted really wild going up and down when i was  idleing.. I got the rac out as no one would help jump start me . He got it started and tested the alternater (did not charge at 1st but then was fine) the battery (fine) the earth (fine). But he thinks theres a problem between the alt and the dash (1 of the wires but he could not do more) as the light on the(battery warning) dash no longer works. Theres also a wire on the positive term on the battery which is not connected. Now when i connect it to the battery the light on the dash goes on but the oil warning light then fails. Does anyone have any ideas on the bulb failing? and what that wire is for?

Thanks