Purney,
The coil wiring you indicate is backwards for a NEG ground system, which a Chevrolet is. If this were a GMC of that vintage, it would make sense.
If this is a NEG ground Chevrolet, Positive (+) side of the coil normally goes to the key switch to get power when you turn the key on and stomp the starter. The negative (-) side goes to the distributor.
14 gauge or 16 gauge would work fine for these wires. You mention a wire running from a 'starter post on the firewall'. I'm not sure what this is. This doesn't sound like anything one would find on a unmolested Stovebolt.
I think more information is needed. It sounds like something might have been swapped or modified in some way.
Stuart
