New wire is good. Same gauge is best, larger (gauge) wire is good; smaller wire is not good. What you ordered should be OK.
I asked about the heat-shrink tubing, so that you can try to salvage the oil pressure sensor terminal. Tape won't cut it, where it lives.
>>> Does your truck have dash indicator lights for oil and temp, or gauges?
The wire loom, is for, well, looming wires into harnesses. Not for making wiring / splice connections.
>>> How are you planning on making your actual wiring connections? With the C102 harness repair, and the GM HEI, there will be some wires which will need to spliced.
In your picture, the wire that is spliced looks to be the Brown / Pink ignition +12v wire on C102, which appears to have been spliced to the White / Light Blue dashes ignition +12v wire on the round, black 3-pin (but only 2 wires) C107 connector. My guess that is a previous owner lost the original (White / Light Blue) ignition circuit on C107, and bubba-repaired it by using the Brown / Pink from C102. I don't know what the GM HEI plugs look like, but since you're not using a Ford ignition module I'm thinking that you'll not be using C107 anyway.