Doing your own works means your going to have to learn.
One of the best ways to learn is to go through the whole loom, clean/check all connections, (bullet, couplings and all grounds/earths), while doing a continuity test of all circuits, between switches then on the wires through switches. Disassemble the bar switches, clean check for damaged wires, and re-grease, with a lithium type, (the bar-switches i mean on moving parts)
Doing this circuit by circuit while using the diagram, you will slowly get to know loom and how it works. The intricacies on how a part works isn't important. The important thing is to get to know where goes to what. Doing this will also have your loom/Harness in top shape by identifying any cut or damaged wires or cleaning up any oxidization or damaged couplings.
Simple layman's terms on what happens when the key is turned on, by XSLeo
https://www.xs650.com/threads/what-happens-when-you-turn-your-key-on.9625/
Important read, by DaddyG
https://www.xs650.com/threads/grounds-so-important.41775/
Simple guide to continuity testing using a Meter
https://www.xs650.com/threads/continuity-testing-made-easy.49917/
Good read as per the heading, by 19074jh5
https://www.xs650.com/threads/wiring-harness-musings.18925/
A bit more of an indepth on Electrics, By Dan
http://www.dansmc.com/electricaltesting.htm
A good way that helps is to brake the diagram into circuits. Print off a few and use a marker to blot out and leave just the wires/circuit your working on. Or if your proficent and have a Photo, (like Photoshop), program where you can blot out areas as per the diagram below
I have done this to the 75/76 diagram and have left just the ignition circuit and kill switch. On this it has a Br and Y wire going to and from the Kill switch, (the Y could be just a mistake on the diagram), when you trace the Y from the kill switch it joins up with a R/W going to the coils. So maybe that Y should be a R/W all the way, which would make it the same as yours with a Br and R/W wire