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The lights and horn go off if your car is locked. It freaks out because it's "locked" but the hood is open. Also there shouldn't be any current at all if the negative cable isn't connected, and you should be connecting the positive first, then the negative. So.. start there, make the switches in the cabin are in the unlock position.
For the extra wire, does it go to the negative or positive battery connector? It could be a grounding point you missed somehow, if it connects to negative, otherwise I don't know.
It looks like you have the battery connected BACKWARDS......the EPS fuse is on the positive terminal.......and should be hooked to the RED battery post
You have the Neg battery wires connected to the positive terminal...the dead giveaway is the wire with the red stripe going from Battery + to the frame.....Dude you are making an ARC WELDER