Been following this thread since the beginning, and holy moly it looks now. What a fantastic job! Sending many prayers for no stringing drama your way!
Ground it to the tailpiece, which is touching the strings.
As to the switch - Gretsch stuff was mysterious as hell - still is in some ways.
You'll figure it out.
I got the harness put together. Everything works as it should except I'm a bit unsure on the tone switch.
I can hear it switching from one position to the next but it's super hard to tell just doing a tap test with a screwdriver if there is a real difference from one position to the next. I don't have it installed and strung up because I am making 1000% certain this is all perfect before I weave it through there without even any F-holes for access.