To explain: the stud on the starter is used as the main "junction box" for all the 12V supplies on the van, including the +ve from the battery and B+ from the alternator etc, and the +12 supply to the fusebox at the front of the van. Internally, it's connected to one contact for the starter motor. The smaller tab energises the solenoid when you stick 12V on it via the ignition switch. The solenoid shoves the starter pinion forwards into engagement with the flywheel, then hits a set of contacts that switch a biiiiiig current through to the starter motor, which then cranks the flywheel round. Easy, peasy.
I'm not sure if you've done it already but it'd be worth sticking your multi-meter on the stud to verify it has 12v. So positive probe on your meter to the connection circled in red, negative probe to a good earth on the chassis. And then just to double check, when shorting out the connection you're just connecting the connection circled red to the connection circled green?
The test should be to connect the red circled stud to the green circled terminal. The big lump off to the right of your picture is just the body of the starter and won't do anything.
If you have no voltage on the red circled stud then it’s a fault on/in the cable from battery’s to starter Isn’t that the cable that melted?
Nope, to quote myself: "I'm not sure if you've done it already but it'd be worth sticking your multi-meter on the stud to verify it has 12v. So positive probe on your meter to the connection circled in red, negative probe to a good earth on the chassis."
So power arrives at solenoid, when i turn key power arrives at other nut but nothing happens so.... Solenoid/ starter is frazzled(explains the noise when i found fire)
The tests suggest both the solenoid and the starter motor have failed. Do the ignition and oil lights stay bright when you turn the key to the start position?