The light blue wires are not the headlight circuit. Dark blue is high beam, white is low beam. The high beam indicator has a blue and green wire to it. The left switchpod gets HEAD fused power on the Bk/Y (black/yellow) wire, and sends it to the high (B=blue) or low (W=white) filament in the lamp. The HEAD fuse gets power from the starter button, this gets key-on power (Bk wire) and, when not pushed, passes it to the BK/R (black/red) wire going to the HEAD fuse. It disconnects the headlight when pressed, presumably to provide more power for the starter motor and ignition during electric start.
"No headlight" is usually the starter button switch, the HEAD fuse or the clips for it, or the connections inside the fuse box. Or some bad bullet connector in the harness.
Measure DC voltage from ground to the HEAD fuse clips with the fuse removed: one end should be battery +12 when the key is on. Using a test lamp may be better than using a meter, a bad connection can read good voltage but won't pass enough power to light a signal bulb. With the fuse installed both ends should have voltage. Check that power is getting to the Bk/Y wire into the switchpod (this harness connection is under the tank, switchpod wires don't come to the headlight bucket). I expect you will find the problem is either the starter switch or the fuse/fusebox. You can eliminate the starter switch by plugging the Bk/R harness wire connector meant for the right switchpod into any open black terminal, the harness wire should be a male and there should be a triple female black with an open connection. The Bk/R wire from the switchpod will be a female, this will be left unused. The headlight will now stay on during electric start but that doesn't seem to make starting any less effective.
Cleaning the fuse clips where they touch the fuse, and the fuse ends, may help. Inside the fusebox (remove it and the back pries off) can fail from overheating, the wires must be firmly soldered to the clips: if any wiggle around then the connection is bad. Resolder or (preferably) replace with a modern minifuse fusebox - you can get ones that mount and connect just like the original.
Get (download) a Honda wiring diagram (not Haynes, Clymer, or any colored website one) and try to understand it. It will be worth the effort. The switch function blocks are confusing but they do make sense and only the Honda diagram includes everything on the bike. If you download a copy that isn't readable, keep looking: there are high quality scans to be found where the lettering is clear.