Is it necessary for the + and - wires have to go directly to the battery like in this diagram? Or can hey go to any + and - connection?

Is the mercathode needed if the boat is trailered and never left in the water?

Probably not, but I figure since I have it I might as well connect it. My boat sits in the water for a day or two sometimes.

if your boat stays in the water all the time the + needs a constant supply of power.if it's on a trailer wire it through battery switch or on the starter as said before.

You can also "piggy back" another controller to your existing controller for added protection if needed.By doulbling up it puts out more blocking current.

If the + is wired to the starter will it draw current when the boat is sitting on the trailer? Will it kill the battery? I don't have a battery switch.

If you don't have a battery switch, it will draw current but probably not kill the battery.
The consumption is negligible.

Dosen't draw much until reference electrode detects stay voltage in water. Then it sends out a blocking current. Won't work to well if the boat is docked or moored in more than 5mph current (you'll end up protecting the guy's drive next to you).

No.... if the boat is out of the water... the mercathode doesn't work at all... it requires the water as a "medium" to work... The mercathode only works when you are sitting still... I had a mercathode system PLUS lots of sacrificial anodes on the stern... the anodes were still taking a big hit from the salt water.... On my next boat I'm not even going to bother thinking about that system... If you properly protect your alloy parts on the stern with anodes it isn't necessary. If you are parked in a slip while in salt water, and someone near is running shore power without a proper galvanic isolator... your stuff is going to be toast ... mercathode or not. The best thing is to not leave it in salt water for long periods at a time... and check the anodes often. That means making sure they are properly attached and clean. The anode works by connecting electrically with the metal it is protecting. So the surfaces that touch need to be properly connected. I had anodes on EVERYTHING that was alloy .... PLUS... if you have stainless steel trim indicators that are clamped onto the rams.. make sure you wrap the alloy ram with electrical tape BEFORE the clamps go on... then clamp only on the area that is protected with tape... If you do not tape that area... there will be tremendous pitting under the stainless clamps that you won't see until the damage is horrible. Remember... Galvanic corrosion happens between DIFFERENT metals... the light alloy dissolves and plates the heavier metal... like stainless.

um,, since electricity travels at approximately 669,600,000 miles per hour the current would have to be a bit faster than 5mph for the electrons to travel far enough off path ( which would normally be a straight line) before you would be protecting the guys boat next to you.