Trying to set up Arduino via serial dongle, is this right?

6 pin connector on top is for a FTDI serial dongle I am getting (slow mail) and I just wanted to be sure I got the wiring correct at minimum. DTR (pin 1) goes through 0.1 uF cap to reset, which then has a 10k pullup. RX and TX from pin 2 and 3 goes to pin 3 and 2 (D1 and D0) respectively. 16MHz clock plus additional caps for noise filter.

This all assumes the chip is correctly loaded with bootloader for serial connection.

There is no diode from /RESET to VCC. A (wrong) signal on the DTR could raise the voltage of the /RESET above VCC and turn it into HV programming mode and corrupt the bootloader. That is not funny. I think you should really add that diode.

The RX and TX are not protected with a resistor. It is not needed, but you could add resistors between the connector and the ATmega328P of 100Ω to 1kΩ.

The RX is open and floating, thus it is receiving noise. The signal is idle high, therefor you could add a pullup resistor between RX and VCC of 10k.

There is no capacitor between AREF and GND. I suppose your analog values don't have to be accurate. That's okay, you can almost get the same accuracy with averaging many samples.

Some usb-serial chips have 3.3V signals. The RX and TX will probably work, but a 3.3V DTR signal might not be enough to reset the chip.

I don't know which RX or TX goes to D1 or D0 of the FTDI, you have to check that with an official Arduino schematic, for example the Arduino Nano.

Where did you buy the FTDI module ? On Ebay/AliExpress/Amazon ? Then it is probably counterfeit. If something is not working properly, then throw that one away without thinking about it. Can you buy from a good seller or buy another module with other chip ?

Koepel:
There is no diode from /RESET to VCC. A (wrong) signal on the DTR could raise the voltage of the /RESET above VCC and turn it into HV programming mode and corrupt the bootloader. That is not funny. I think you should really add that diode.

Can do that. Cathode which way, toward DTR pin or toward reset pin? EDIT: nm, diode from reset pin to 5v, cathode on 5v.

The RX and TX are not protected with a resistor. It is not needed, but you could add resistors between the connector and the ATmega328P of 100Ω to 1kΩ.

I'll do that if I see problem without resistors.

The RX is open and floating, thus it is receiving noise. The signal is idle high, therefor you could add a pullup resistor between RX and VCC of 10k.

Added to schematic for my reference.

There is no capacitor between AREF and GND. I suppose your analog values don't have to be accurate. That's okay, you can almost get the same accuracy with averaging many samples.

Generally AREF can be ignored if I am not using analog read function.

Some usb-serial chips have 3.3V signals. The RX and TX will probably work, but a 3.3V DTR signal might not be enough to reset the chip.

The one I got has jumper for 5v and 3.3v mode. So there should be 5v signal when jumper is set to 5v but I'll check with my meter when it comes. It is possible the 5v is just for the Vcc pin out and the signal are all 3.3v level.

I don't know which RX or TX goes to D1 or D0 of the FTDI, you have to check that with an official Arduino schematic, for example the Arduino Nano.

I think I have it right in the schematic.

Where did you buy the FTDI module ? On Ebay/AliExpress/Amazon ? Then it is probably counterfeit. If something is not working properly, then throw that one away without thinking about it. Can you buy from a good seller or buy another module with other chip ?

Can't tell if it's bad yet when it hasn't arrived. When I get it, I'll check for 5v level and do the loopback test.

I have a pile of counterfeit FTDI FT232RL modules I use all the time with never a problem other than the "FTDIgate" windows driver that changed the PID. I only needed to install a different driver to fix that. I wouldn't use them in a product I sold but for my own personal use they're just fine. Of course considering the price it's definitely wasting time messing with one that's having problems. Actually the only one I ever killed had the real FTDI chip. You can get CH340 modules for a little cheaper with no worries about the FTDIgate thing but you might need to download the driver from the manufacturer's website.