To your question about a 3 position switch, there are two methods for wiring a bilge pump. You are using the favored method which assures the pump will always go on when the water level rises in the bilge. To be clear, that is the method I use when installing a new pump. The second method, which is common OEM wiring on the old boats I have experience with, uses a 3 position switch. The circuit allows the pump to be off, automatic (float) or on. In the off position the pump will not run even if the boat is sinking. So why would you want that? To keep from pumping oil or gas into the lake/ocean when you have a leak. Maybe the old float switches would float in anything, but newer float and electronic switches will only float/switch in water, not gas or oil.
Last year I had first hand experience with this. Hauling the boat up to Long Beach to launch shook the old tank enough to rupture a heavily corroded spot. When we got to the ramp I could smell gas as soon as I walked back to the boat. The bilge was slowly filling with gas from the leaky tank. So disappointed, I wasn't thinking straight and just headed for home. About half way home I remembered the hardwired bilge pump and about freaked out. Can you imagine pumping the bilge gas onto the freeway at speed? Other drivers might have objected. That was also when I realized the switches were not activating in the gas. Reading about the switches later it actually says they will not switch in oil or gas. If it ever happens again though, I'm pulling the fuses before getting on the road.