Regarding the wire gauge - an online calculator says a 13 volt source pushing 50 amps through 5 feet of 12 AWG wire will drop to just below 12 volts at the end. So that may be your problem. Here's a link to the calculator so you can evaluate other AWG options:
Link
As for the routing - I wired my Cheetah with the main positive battery cable going directly to the starter solenoid, and from there through an 80 amp fuse to the main bus. The alternator output goes through an 80 amp fuse to the same main bus. If you route your alternator output to the + battery cable at the starter you are effectively using that post as the main bus that powers every other system in the car. That is not an uncommon way to do it. P.S. If the fittings at the ends of either of your battery cables are loose or corroded, that may be part of the problem too.