Hello and welcome to the forum.
We do have a specific 500(USA) section, but this is such a common fault on the european cars that I'll leave this one where it is for now.
You are telling me this disconnected wire right here in the boot is the cause of all the issues?!
It's likely the cause. It's probable you'll find further damage to the wiring when this is stripped back fully.
The risk (and I hope this hasn't already happened to you) is that a stray electrical feed or short circuit damages one or more of the electronic modules on the car. If that happens, then repair will also involve replacing the failed module(s).
I can't prove this yet, but I strongly suspect that at least some of the common electronic failures we see on the forum (esp. instrument cluster & airbag ECU) are a direct consequence of the failure of this part of the loom.
Right now, all you can do is to disconnect the battery, properly repair any damaged wiring, reconnect the battery and keep your fingers crossed that everything works again. If it doesn't, next step is to check fuses & do a proxi alignment. After that, run diagnostics and take it from there.
I'll keep my fingers crossed for you also.