Sense goes to your car end of the positive battery cable.
Light goes to any 12v source that is on only when the key is on.
Use the factory dash light wire if you know which it is. If you have a volt gauge it's not so important. Most of the cs130 alts don't need the bulb in the circuit, but you can simply add one under the hood if you want.
I surely did read that article Nessmuk, unfortunately, for lack of a wiring diagram in that damm GMC SM I can't tell if that existing wire is the one to connect the "L" circuit to or not. What I mean is my truck can't be the only one out there whose O.E. pigtail is like the of the exitsting one.
For your first question, yes. For your second question, I am not up on that kind of thing as I'm not experienced with one wire systems. But, I'm sure Terry at Truck N Tractor could help you.
Here's what I just learned about the existing wire on that CS130 alternator;
There seems to be some electrical tape on that wire from the harness, perhaps someone else (PO) already added a resistor?