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Anyone know what the blue connector below (circled in red) is for? I don't have it plugged into anything and don't think it ever has been.. but I'm curious what it's for.
You're more likely to find that information from the stereo manual. Does that unit support GPS? Kind of looks like a connector for the receiver that mounts externally.
I see two problems with that rat's nest. First, yeah, the yellow butt splices are for larger gauge wires. Even if they're crimped down fairly tight, the splices will be sloppy, and eventually the wires in them are liable to come out of the splices. That's the whole point behind the different colors. They indicate the wire sizes that they're designed for. Notice the ones below them, which is the second problem.
Two sets of splices that close together? BAD idea. The "smaller" ones, with the heat shrink on them, are the right size for the wires they're on. Those will last. The yellow ones will get sloppy over time, and that will put noise in the wires they're on. They will also, as I mentioned earlier, possibly come loose and slip out of the splices.
A decent solution, and I'm real big on this, would be to cut the yellow splices out of the wires, or even both ssts of splices, and SOLDER jumper wires in to make the whole affair long enough to reach. Each solder join should have heat shrink on it, too. Strip the wires, tin then, form each end into a J shape with a pair of needl nose pliers, and hook them together, crimp them down with the pliers, so the two Js and tight on each other, and flow a little solder onto them. Slide the heat shrink down over the join and shrink it down. Best possible way to fix that whole set up. Use a 35 watt iron, resin core solder, and always put a drop of liquid flux on a join before you flow the solder on. Tin the iron, and touch it to the join. You should get a nice, shiney join, with just a small amount of solder on it. You should be able to see the shape of the wires once they're soldered. Always wipe the iron on a damp sponge before and after every use. retin the iron after you wipe it.
I use the yellow butt connectors for my work. I use them occasionally, but only on 10 gauge wire. I used to use butt connectors for automotive before I knew better. Now its solder and shrink wrap.
My 4runner has solder and tape. If the adapter plugs were available 20 years ago, I wasn't aware of it. While the butt connectors should be strong enough, I'd worry about signal loss or distortion. I love the fact that the 1st gen 4runners fit a 2din stereo with no modifications.