To fix this issue do you think the re-soldering the wires and re-insulating them better, then resetting the warning lights on the diagnostics will fix it ?. I will be checking my wiring when it gets back from the garage.
In a word, no.
That section of the loom is damaged beyond repair; I'll need to cut back both ends of all the wires to sound material that's not been previously flexed repeatedly and patch in new material. The new wire I patch in will need to both have more flexible insulation and have a higher number of strands per cable (much like the kind of wire that's used for test leads), so that it can cope with the bad design of the cable routing (that can't easily be fixed; new holes in the hatch + a custom grommet would be the minimum that was needed). It'll likely be a pain to source the right cabling, since several different gauges have been used and only a small length of each will be needed. I'll also need to regularly monitor the repaired section until I'm sure the new cable I've chosen is up to the job.
Just soldering up what's broken and adding a bit of extra insulation may give a temporary fix, but it won't last five minutes. Both the sheath and the cores of the existing cables near to the point of failure will already be much more brittle than the rest, due to work hardening from the repeated flexing. Folks who take their car to an auto electrician need to make sure they cut back to sound cable, or they'll soon be repairing it again for a second time. All the wires will need a new section splicing in; thre isn't enough slack in the cable to do otherwise.
Also replacing what's there with 'like-for-like' wire (which is what I suspect a Fiat dealer would do) won't be durable in the long term; such a repair isn't likely to last any longer than the original.
Fiat need to either change the basic design or use a different type of cable for this section of the loom.
As to whether a simple reset using diagnostics will restore full functionality once the wiring has been fixed, only time will tell. Aircraft systems are designed as far as possible to be resistant to stray electrical feeds and spurious grounding (
this tragic accident is one of the reasons why), but somehow I doubt Fiat will have built the necessary electrical protections into the various electronic modules.
Hifi enthusiasts might remember how you could ruin a cheap amplifier by shorting out the speaker connections; better quality amps had sufficient extra protection circuitry to cope with such things.
I've taken lots of pictures of the damaged wiring before cutting or moving anything. If a simple reset isn't sufficient, I'll use these pictures to establish which electrical circuits on the car could have either shorted to ground, or received an undemanded live feed, which could help me work out how other modules on the car might have been affected.
I've said it before, but a close examination of this wiring should be an essential part of any pre-purchase inspection on a used 500.