On the matter of the horn and lights: A Dynamo is just another type of generator to produce electric current. The voltage will vary with the load. If you severely overload any type of generator then the voltage will start to drop. The more severe the overload is, the deeper the voltage drop will be. A battery that has bad cells can short out internally, and I have even seen batteries that are allowed to discharge so deeply that the polarity will reverse in a single cell of in the entire battery. That can sometimes cause the battery to explode, but it would definitely present a heavy overload to your generator. Now another principal also comes into play... Electricity always follows the path of least resistance. If you battery has an internally shorted cell, or a polarity reversal, then it is going to be the absolute least resistance anywhere in the system. As long as that load is there you won't get enough extra electricity to operate the coil in a horn or to light the filament in a bulb because it's all flowing through the battery.