Just connect all your grounds (0v) together. DON'T connect them to CN1!
Alternatively, if you use a wall-wart as a supply, you can ommit DB1 and change E1 to a 1uF, and just connect your grounds to the neg. side of the wall-wart, and pin one of the 7805 to the positive of your wall-wart. Also, ommit E2 and E3, and just de-couple your chips correctly.
That wall-wart can be anything from about 7v to 15v for what you are running, without having to worry too much about a heatsink for the 7805 (a small one is always a good idea though).