The small red wire is an anti-spark arrestor. It has a bullet connector (1.5 or 2mm I believe). You attach one side to your battery's positive lead and the other to your ESC positive. Connect the two together first before plugging in the power.
I assume the small red wire in the flight pack wire is to charge the capacitors an eliminate the initial arcing of the high voltage?
Is it ok to not use it?
Yes, you can run the ESC without it. Many do so.
Also the LED cable- us that only for initial programming or do you keep it on for messages like over amped or?
Running 12s maybe 6 at times.. VBAR gov
I keep mine on the ESC. It helps me to see if there are errors on initialization, or overcurrent. You can take it off if you don't need it or want it on there.
Team Compass USA, KBDD Team Pilot