We had one of those when I was a kid. I always thought that tan bag looked like a giant Band-Aid. Mom gave it to me when they updated to a Singer upright in the late '80s. I kept it for about 10 years and got rid of it when I moved in 1998.
About the switch. It sounds like it's got a short. You can tell for sure by putting an ohm meter on it and seeing if the circuit opens and closes as you move the switch. If it stays closed, you've got a dead short and need a new switch.