...and looked at it and that ground wire that screws into the wall had rusted and broke. That's when I noticed the wire it was connected to.
Ok, so that wire is just a ground? I say "just" but of course grounds are critical to the health of any electrical system. And that wire is not doing much, or at least not doing it very well, no matter how you look at it.
Time to replace it for sure, but depending on what it was originally, it might not be part of a new harness.
Hard to say.
If you have always had good luck with your old alternator, and don't have much in the way of need for a better setup, then you don't necessarily 'have to" change. But it's a good idea because it's a good unit, so basically rguest's recommendation is a good one.
All new harness because you have to, so that's good. But you will lose the ammeter function in the cluster.
If you don't use the ammeter anyway, no great loss.
Paul