Check out the TP-31058/1 Green Book - I've just emailed a copy to @jamesinc for adding to the Oz Volvo Technical Library, so hopefully he'll have a chance to add it there soonish.
According to it, Relay K is the headlight relay. (pdf page 7)
Refer to pdf page 3:
Fuse #16 is the heater fan fuse for auto-climate controlled cars. Sooooo... ayup; it's cooked in the past (not uncommon).
Fuses #14, 15, 16 (plus #23) are power fed from the X15 terminal of the ignition switch. So if you're having dramas with the horn (fuse #15) it appears there's a problem with that feed rail on the fuse box.
Fuse #6 (which also seems to have gotten hawt 'n' heavy in the past) looks like it was the seat heater power feed.
Relays should not buzz, so some high weirdness is going on there.
Anyway, it might be an idea to check out that PDF first and see if it answers many of your questions.
Edited to add: Thanks James - you can look up the PDF now - it's there as TP31058_1 1987 740 760 Wiring Diagrams.pdf