The black wire with the spade lug goes to chassis ground under a screw, most likely the screw that holds the e-unit in place. Your picture is unclear about the yellow wires, but if your loco has 2 roller pickups, and the wires are yellow coming from both of them, then all the yellow wires should be connected together with the wire nut. Here is a schematic http://pictures.olsenstoy.com/cd/locos%5Cloc2300a.pdf of a similar postwar loco; just ignore the horn, battery and relay.

Larry