I'm not familiar with the I6 but basically the starter itself is grounded to the engine block via the starter mounting bolts and general metal to metal contact. You want a negative wire the same gauge as the positive wire from the solenoid to starter. The negative cable from the block goes to the negative terminal on the battery. So a bolt as you say with the 7/16" stud would probably be the point. You need to have a ground wire from the engine to body. You need this because of ground paths needed from the body would otherwise find alternate routes to the battery ground cable on the block going through the transmission or engine components that were not intended to carry current loads. This could be things like bearings and gears causing pitting. Make sure the threads on the bolts intended for the power to the battery are clean as well.

 

The stud is supposed to be bolted to the engine. Then whatever wires are attached secondarily. Standard industry practice. At that point I also add a "ground strap" from that stud to the chassis. Right where the bottom of the motor mount bracket bolts on is ideal. Then a second small ground strap at the back of the engine to the engine compartment firewall. (Helps prevent weird gauge panel issues, among other things.)

 

The stud is supposed to be bolted to the engine. Then whatever wires are attached secondarily. Standard industry practice. At that point I also add a "ground strap" from that stud to the chassis. Right where the bottom of the motor mount bracket bolts on is ideal. Then a second small ground strap at the back of the head to the engine compartment firewall. (Helps prevent weird gauge panel issues, among other things.)

Like you, I added an additional ground "cable" from the stud on the block to the chassis, but I elected to utilize the forward sway bar mounting bolt. I also use the strap from the head to the firewall. The additional ground resolved a number of issues attributed to inadequate grounding, the most significant being the intensity of my instrument cluster lighting. I would highly recommend a similar addition to any Mustang.

I also run a voltmeter which proved to me that the ground made a difference.

 

It sounds like you've got the stock grounds in the right places.

Battery and alternator negative to that stud on the block under the alternator

Starter bolt to the firewall

I don't think the order that the wires are on the stud matters. Just make sure that all of the connections on all of the grounds are clean and tight.

 

I have read that when placing multiple wires on a stud it is best practice to have the battery cable be the first to go on, this places the usually wider contact area of this terminal against the surface of the block resulting in a better connection. With that in mind I try to then stack the remaining terminals in decreasing diameter so that the smallest is against the nut. I always use a toothed lock washer or star washer between the battery cable and the block.

 

Thank you all for the advice and information. My instrument cluster is quite dim so I will try the extra ground cable from the block to the chassis similar to rhutt's post. The star washer is also a good call. I will also post a picture of the stud/bolt arrangement on the block. It may be useful to others.