This is '86. '88 is going to be a little different, but the 12SI alternator works the same way.
So here, and then follow the link Tom Collins Electrical page and find wiring diagram for '88. It will have the position in the bulkhead connector for yours.
Notice the red wire in the alternator connector matches the 2 on the alternator. This wire senses the system voltage. So it must be connected to the stud where the battery and alternator also connect.
The other wire (brown in these diagrams) connects at terminal 1. (The connector only goes on one way so they can't be mixed up.) This wire energizes the magnetic field when the key is in Run.
The voltage regulator decides how much current goes into the magnetic field based on what it senses. It also has an internal circuit that redirects some of the alternator's output back to the field. So then it doesn't need power to come the long way around through the key switch. But it also means that diverted power could be feed igntion even when the key is turned off. The resistance wire prevents that from happening. That's a section of non-stranded wire, sometimes pretty long.