I'd be surprised if it's the source of the problem.
The current through the kill switch is normally not very large, it supplies 12v to the coils and the ignition cut-out relay. A fault with it could cause the sparks to die, but I can't think how it would make the ignition unit overheat. It's possibly an indication of the route that the excess current is taking though, do the coils get hot too? Of course, if one coil gets hot and the other doesn't, that could be the cause of the problem, though it's usual to have a duff coil that still provides a decent spark. My money's still on the ignition unit.
The pong isn't really coming from the main light switch is it? That supplies a high current so slight contact resistance would easily result in overheating and a burning smell in the same area.