(with battery in the car and pos terminal on the battery, touching neg terminal on to the battery gives a big spark
You have something getting power. I'm sure that you have checked the key position ... so if it's a BIG spark, then it's drawing a lot of current so look at those things (Starter, alternator, sub-woofer?, HID lights etc) If it's a smaller spark then look at smaller items.
It is true that if nothing is turned on at the time, you shouldn't get a spark by connecting the battery up.
By running a test light between the block and the -ve terminal, the light should only shine if something is 'turned on' or has shorted out. With everything turned off, the circuit souldn't be completing and therefore no light.
If a battery terminal is getting hot, that confirms, for me, that there is a short in the system. (don't discount a short in the battery its self).
I would look at a trial and error system. You said that there are no pinched wires, and you've tried other starters, so disconnect the electrical supply of the alternator and try again, if no good then try other components. Are you carby or EFI? Don't forget the EFI system and all it's components.
The lack of ignition spark could be as a result of too much loss of current either before or during engine crank to create a spark OR maybe the problem is in your coil?
Chasing electrical problems is the bane of any mechanics life. Good Luck and be methodical. You will find the problem.