Listen, look carefully at the photos. When the 2 top contacts are touching, the electrical connection is complete and current will flow. In this condition, the switch is ON and the motor will be running regardless of what the deck keys are doing.
When the contacts (top and middle) are no longer touching, the switch is OFF, electrical connection is broken and no current will pass. This is where the switch should be when all the keys are in the up position.
You can measure continuity between the two top terminals if you wish to electrically confirm what I'm saying although you can visibly see exactly what I'm saying. As to whether or not the switch is broken, that depends on whether the linkage lever is depressing the switch. You can't see this from the front of the deck, you have to look at the back. It's easy to do, just depress the play button while looking at the back of the deck. You should see the lever above the switch sink. When that linkage depresses the switch, it should turn the switch ON. However, if the switch is in the ON position without the sliding linkage touching it, then it is broken because it is not working like it is supposed to be. Broken doesn't necessarily mean you see a mechanical break somewhere, it simply means it's not functioning properly. That's a complicated switch. There is two parallel planes. When you flex those two planes, the upper one can't stretch so the lower one has to compress. This compression is what causes the middle leaf to deflect, snap up and touch the top leaf.
THIS BOOMBOX HAS BEEN OBSOLETE FOR DECADES. JVC does not sell parts to repair it anymore. If the switch is broken, you will need to devise a solution yourself so that when the linkage is depressed, a switch will turn on. Replacement leaf switches are available, just not an exact JVC part. Every member collector here knows that unless you can find used parts, you often have to engineer some solution to keep these things running. Sanding wheels is not a JVC sanctioned service technique. Only because replacement parts are hard, often impossible to find.
As for the clicking, you are losing the forest from the trees. The deck motor is not intended to constantly spin with all the deck keys in the up position. Who knows if this is a consequence of that. You need to address things one at a time, I think I hinted as much. Keep in mind that this deck has a solenoid that will definitely click when it is actuated. I believe it is a stop solenoid for the music search feature but might also function for the deck stop too for end of tape. Are you operating the deck without a cassette tape in the chamber? If so, then the autostop probably is actuating. Regardless, only you have the deck in front of you, you'll need to check operation on the workbench to see if everything is working properly. We can't see what's going on with simply a few photos. If you think this is over your head, you might have to just send this off to a technician or maybe buy a used deck.
Hope this helps, good luck on the repair.
