For the first question...your ground must ultimately have a clean run all the way back to your negative terminal on the battery(s). There is nothing wrong with running the alternators ground to the ground on the starter motor
...so long as all the connections are clean, tight and of adequate gauge. Gauge your starter motor
ground for the starter motors maximum output, so you are still good if your alternator mount starts to oxidize or shake loose...(at least electrically you are still good).
Starter motor grounds sometimes shake loose, so that may be Balmars concern. Balmars other concern is that some engines may not have a ground at the starter motor and may have the engine
ground elsewhere or a poor engine ground. I think Ballmar just wants to make sure their alternator is going to work for you by giving you default directions of running the ground all the way back to the start battery or negative bus terminal. It would not hurt to run your alternator ground all the way back to the battery or the negative bus terminal for your batteries if you are concerned.
For your second question, gauge your wire for the greatest load or combinations of loads. For most boats, it will be your starter motor that has the greatest draw. For other loads guage them for their maximum draw. For devices that charge the battery, gauge those for their maximum charge.
Be sure to put heatshrink on all your crimp connectors to keep the oxidation from occurring inside the crimp-wire interface.
Does that answer it?