OK, here's how a solenoid works:
It is essentially a large current relay, controlled by a low current coil.
Loop A, if you will, is the low current side. It takes V+ from your battery or starter switch in this case, and connects it to one side, and the other is connected to ground. When you connect V+ to the top, it energizes a small coil, which closes the contacts on the high current side (loop B). When the high current contacts close, the battery connection is directly connected to the + post on the battery. When you release the starter switch, the coil in loop A de-energizes, and a small spring opens the high current contacts. Current is then no longer flowing along the high current side (loop B)
This is done so the 15-20 amps the starter needs isn't connected via a small current switch. If you DO connect this amount of current over such a switch, the contacts will pit out and eventually stop working.
I hope this helps.
Luke M
Used to have a 1979 CB750L, sold it as a parts bike, now riding a slightly modified 1984 VT700C. Network/Field Engineer. Central OH, USA, Earth, Sol System, Milky Way Galaxy, Universe.