1996 850 some alternator wiring questions

[Ians Platinum]

Well, I was hoping to have some time to introduce myself and my car before I began asking for help, so I guess I will do both in this post.
Before I get to my problems, I will give y'all some background information/my story.
My first car was a Volvo, and it's all I wanted. After some trading around, I finally founded the 850 I wanted. It was an 854 platinum edition on a craigslist ad in a sketchy dealership in downtown Dallas. It had zero compression in cylinder #5, barely ran, no plates, wrecked interior, minor front end damage, and the usual wear and tear. But I had to have it. I had to have it. So I ended up buying it for $900.
A 2.5l engine swap later, with new coolant temp sensor, evap purge valve, throttle position sensor, timing belt, phenolic intake spacer, r manifold, alternator, oil cooler hoses, evap hose, rear shocks and overload springs, silicone hoses, 780 bertone wheels, brembo rotors, akebono pads, ipd ignition cables, new distributor, rotor, k&n air filter..... Ok you get it. It's been hell and back, but it's been fun. I will start an introductory post later to cover some more stuff in detail with some pictures.

So anyways, I was really bummed to find that I had to replace my alternator a couple of months ago. It had a bad bearing, along with a faulty voltage regulator, so I opted for a Bosch rebuilt replacement. 2 days ago, north Texas had some gnarly rain and I definitely drove through some big puddles. I also don't have a splash guard... Wasn't wearing my thinking cap that night. So, yesterday, before a concert, I listened to music with the engine off for maybe 10 minutes. Battery is less than a year old. When I came to start it, the starter was slow, but it started. Every start has been fine afterwards, but I am getting an idle voltage of 13.0V, and am a bit worried.
That is concern #1.
Concern #2 is with the way the car is wired. It came with an upgrade (installed by Volvo in 1996) alarm system, so the wiring is already a bit different than stock. I currently can only start the car if the immobilizer fuse is pulled. That doesn't seem right to me. Also, probably the biggest point is that my alternator is hardwired to my battery. Literally, there is a 12gauge white wire that is connected to my alternator that goes straight across my fan to my positive battery terminal. It definitely seems ghetto rigged, unless this is normal (I highly doubt). I tried playing with the connection, but the car turned off when I removed the white wire from the battery. Since then, I have decided it would be in the best interest of my cars electronics to not jack around with that anymore. Any ideas what this is and why it was put on my car? Do you think the positive cable is too resistive and was not carrying enough voltage, so the previous bonehead decided to hardwire the thing? Or am I going crazy and calling people boneheads that don't deserve to be called a bonehead?
Any and all help is appreciated. I will go update with pictures.

[erikv11]

On the 13V at idle, next thing I would do is check all of the various ground wires, plus the condition of the positive battery cable and its connectors.

[tryingbe]

When the car is running, turn everything on, a/c max, defrost, headlight, interior light, etc.

Then take a multimeter to measure from the POS of the alternator to the POS of the battery and see what the voltage drop is. If it is any bigger than .1V, upgrade the alternator to starter, starter to battery, and the two ground cables.

[Klausc]

I suspect that the large red wire is fubar, it usually goes bad at the battery end. Volvo wants an arm and a leg for a new one, but some of the parts stores have it a little cheaper. Or, stop by a pick & pull and get one - 850/70s up to 2000 should work nicely.

Do you have a remote? If not, try using the key on the passenger side to unlock all of the locks and see if it will start. My 1996 has a problem with the inside dash switch that locks/unlocks the doors - I pulled the switch and the door locks worked normally.

The little red LED on the dash must go out when the car is unlocked.

And, for Gods sake, get rid of that extra wire!!!