Looks like fungus or disease attacked the branch starting at the wound hole. In the best case it might be possible to save the branch if the cracked bark/dead area is removed along with any soft/decayed wood. Then you could regularly paint on liquid copper fungicide (including under the sides of the rod and on the other side of the rod) until the tree grows around from each side and closes its wound. It would take several years however and no guarantees of full recovery. The next best case you would have to add a wood post to support that corner of the tree house and cut that one branch off below any bit of dead area to prevent disease from reaching the trunk, then regularly paint on liquid copper fungicide until the cut branch closes up the wound over a few years. The worst case is if the tree is deeply infected with any bad disease at that branch, it could spread all the way down to the trunk eventually and kill the whole tree over several years.

Do you know the kind of tree the small one is? I am a bit concerned about the double trunk and whether it is a good choice to have there long term. If you don't know, take photos of leaves, bark, any seed pods, and the whole plant and post on the tree forum or Name the Plant forum to get an ID. Depending on what it is, it might make more sense to remove and replace that one as part of the overall plan. Did you do something such as paint brush killer on the cut surface of the one you removed or dig out the roots? If not, it will resprout next season, so either digging up the roots or recutting and brush killer will be required before replanting. Are you hoping for year-round privacy from evergreens? I don't think that even densely twiggy plants such as forsythia will be dense enough to provide much privacy in that much shade. Or is just warm weather privacy enough? Would you consider making the bed deeper so you could fit in a couple rows of plants for more privacy? Would you consider growing shade-tolerant vines on the fence? often spruces have relatively shallow, thirsty roots, so can you add a soaker hose or irrigation back there?

I don't understand why lengthening the wire is a difficult procedure. All the chandeliers I have in my home are antiques - one was actually rewired completely as it was originally used gas instead of electricity. They have chains that are attached and the wire just threads through the chains in two of them and is very accessible. The process of lengthening electrical wire is very straightforward - you literally splice the wires together and then add insulation tape of some kind around the area where it has been spliced. Perhaps I am missing something in terms of the process but this kind of electrical wire splicing was done routinely including by me when I wanted to add on/off capability to lamps so I could turn them off without reaching under the shade.

The third hole maybe just was a mistake, I know a lot about canopies, and this one was fabricated to where the U shaped portion is really what is going to bare the weight of this. Im not happy about that. Also you will need a pair of chain pliers to open a heavy cast chain and that wont be fun either. I would like to see what you are working with and suggest you go to a lighting store and order a real canopy.