When thinking about conventional current (current from +ve to gnd) then the names of the drain and source appear to be incorrect, but if you think in terms of electron flow then it makes more sense. For most components the connectors are named based on conventional current, but for some reason MOSFETs are different. That does make it confusing :-(
Work out the maximum expected current and choose the next highest value. Eg 4 X 5 W lights would be 20W. At 12V that will be around 1.7A. So a 2A fuse should be sufficient.
