The Application Input record does not have an ApplicationId set, due to the fact this is a new Application. The output ApplicationId of Application_CreateUpdate is not set in the record Application after that node,
Is it not set for the Application you give to Application_CreateUpdate? For any create Action you should be able to retreive the ID of the created entry as an output value. I am not sure those actions meddle with the actual record you hand them to create in the database, but instead return the id of a new entry in the database.
With that you should be able to manually set it via an assignment node.