I think I'd be attaching the green/black wire to the engine instead of the negative battery post. That gives the absolute best ground/earth for the bike since the engine is generating the electricity.
About the wire size: you're best bet is to match as closely as possible keeping in mind that you must not go smaller. Just like hoses, wire is only as capable as the smallest gauge in a run so if you splice in a smaller gauge it effectively renders the entire run that gauge. The other side of this is using heavier splice wire that the gauge of a run gains nothing...that only works if the increased wire size goes from point to point.
