The negative lead is marked on the case with a white stripe and a negative '-' symbol. That is also the shorter wire in this instance. 16V is the maximum working D.C. voltage that is allowed on the capacitor. You can use a capacitor with a higher voltage rating where a lower voltage is specified. C7 is used in the circuit to smooth the audio signal and turn the D.C. component into an AGC voltage to reduce bias to the previous RF stages when strong signals are present.