I'll try and shed some light to your questions.
The switch really isn't intrusive to your hand when playing games, as it only sticks out 5mm in PC Engine mode, and it's nearly flush in TG16 mode.
There is only one alternative for the switch, which is vertical, but it would mean removing the battery door tab and mount, it is possible, you then could remove the multi player port and fit it in there. I just found in this position it would be a lot more work, and you'd loose the port.
Pin 29 runs a check sum operation on game load, if you remove the pin in normal mode the TG16 games won't load, they don't work by default if you've removed the pin. This could be a different factor if your using a chip mod? All I know is that the instant it was grounded it worked perfectly