This is only the house bank, right? Is there a separate start battery?
E = Engine
Is there any other ground bus? i.e. where do all the service
circuits connect their ground?
I would definitely not be running 2 large gauge wires to the engine
If the batteries were number 1-4 from the bottom of your picture I would connect positive of #1 to the #1 pole of the battery switch and negative of #4 to the engine block. I would also have a heavy gauge negative form #4 going to a negative buss bar for all the service
If you have a battery 5 (start batt) I would not have a problem with it's negative wired to #4 and the positive to the #2 position of the battery switch.
(edit - I think the attached is what you should be aiming for.)