On your 94, the starter gets two sources of power.
The large one is straight from the battery (this is the cable that goes bad).
The small one is from the solenoid.
If you do remove the starter (please disconnect the battery first), yes, you will use the starter case for ground.
You must connect 12v to both terminals of the starter to make it spin. Hold it down, because it can dance right off the workbench. I recommend a set of jumper cables (wire size really matters in this case). Connect 12v+ to the big terminal first, nothing will happen. Jumper from that terminal to the small one and the starter should engage the gear and spin.
In other words, yes (exactly what you had planned).
IMO, it is most likely you have a bad red cable. They corrode way down under the insulation.
2000 2.5 MO5D 4.10 one-wheel drive DD - gave to my older son
1990 STX 87 2.9 going in.....Junked it
2000 3.0 4WD M05D 4.10 S-cab Off-Road package with 235-75-15" tires, hotrod DD, lol