If you have the battery gauge you also have a resistance wire on the key switch at the auxillary terminal along with a large brown wire (12 gauge). This resistance wire is there to give the alternator the resistance it needs in case the light fails or if you don't have the light, in your case.
Just go ahead and connect the brown wire to no;.1 and it should work fine.
Be sure you run the red output wire to the same junction as it was and not directly to the battery or the starter post or the battery gauge will not work.
A diode is a small device in a wiring circuit that will only allow current to travel in one direction (like a check valve) It is different than a resistor which will allow current to travel in either direction but applies a resistance to the current to lower the voltage to a load which requires a lower voltage.
The diode will have an arrow showing the direction of flow of the current and a resistor will have a series of bands on the body that are color coded to show its resistance value. Some have the value (ohms) labeled on the body.
https://www.youtube.com/watch?v=I24e7gF6k5o