Renee, this is what is called an "equipotential conflict", and there's a lot of background info you need to understand what it's showing. SOLIDWORKS Electrical will number each "node" with an equipotential number, and anything that is connected along that same node will want to have the same equpotential number. If you have 2 different equpotential nodes that you somehow link up (number your wires for instance, and then later connect 2 nodes with a different number with a wire), it creates an equipotential numbering conflict. To solve this, right click anywhere on the node and choose "solve equipotential conflict" and choose the number you want representing the node.
Now, to your other question, why does the blue dot show when you've separated the 2 parts of the circuit with a terminal? Well, the terminal (and any other symbol in Electrical) has connection points (go to library and edit the symbol or right click, go to the symbol drop down and select open symbol), the connection points are built with a combination of circuits, as well as terminals. The circuit has a property on it called "information transmission", and if that is set to "passing", it will let the potential on one side of the "circuit" travel through to the other side. So if you had this terminal symbol set to passing and put it in your drawing, the equipotential number will be the same on both sides. If the equipotential number on one side was say "1" and the other "2", those ID's are colliding and causing the conflict. The fix? Replace the terminal with a different terminal symbol that doesn't use a "passing" circuit, but rather uses a "disconnectable" circuit.
Sorry it took so long to get back to your answer I've been in training for both electrical and solidworks. Just so much to learn in this program. Thanks