Yea, you are supposed to cut the wire loop somewhere. One end will go to the battery via another cable or directly. The other end goes to the amp.
The head unit should have a wire called "Remote" which is blue with a white stripe. That connects to the remote connection on the amp. When the head unit is on, there is +12V on the wire and the amp turns on. When the head unit is off, there is no voltage and the amp turns off.
Ok, you still need RCA wires and speaker cable since that kit did not include any.
Are you using an aftermarket or stock head unit?
Here's what you can do:
Connect one wire on that fuse holder to the battery and the other end to the 18ft long 8 ga wire. That wire will go to the amp +12V connection. The 3ft wire will go from the ground on the amp to the chasis. Don't put the fuse in until you've got everything hooked up. The 16ft section of 18 ga wire will go from the remote wire on the head until to the remote connection on the amp.