Difference between packet switch and circuit switch.

In the switching center, with subsequent routing of the message determined by the address indicated in the header and implemented wholly in software. In circuit switching, actual "relays" somewhat like those perhaps still found in telephone central stations make the necessary sequence of connections to route the message to its intended destinations.

In older telephone exchanges and perhaps even now, those relays were/are rather amazing electro-mechanical kludges, with motors and gearing pulling a kind of rotor up and down and around through cylindrical arrays of contacts until the right destination contact was reached. 

(I think the very term "kludge" has some historical connection with these systems. Perhaps it was a brand name at one time.)

And before that (for the benefit of younger readers), telephone operators (usually young ladies) sat in front of arrays (literally hundreds) of telephone "jacks", with an array of corded telephone "plugs" also in front of them. They asked the caller "Number, please?" and plugged the connection in, in accordance with the number you gave them.

In a theoretical way,

A communication network can be circuit switched or packet switched. As the name suggests, in a circuit switched network, the message is transmitted through a physical circuit, that is a hardwired connection exists between the source and the destination path. In a packet switched network, on the other hand, the entire combination of 0's and 1's is divided into a number of segments. Each of these segments is associated with a unique number, which identifies the segment according to the protocol followed, parity information according to the parity scheme followed and a header and a footer, which denote the beginning and end of the data packet respectively. This entire thing constitutes a data packet. In a packet switched network, no physical connection exists between the source and the destination. Packets are sent along different paths as determined by the protocol in charge of the data transfer. The principal advantage of packet switching over circuit switching is that if a fault appears in one of the paths between the source and the destination, only data packets travelling along that path are lost. The entire communication need not be restarted and only the lost data packets can be resent along a different path. However the protocol followed in packet switching has to take care of rearranging the data packets once they reach the destination.

Why grounding is necessary?

For the old light switch, there are 2 screws, a front metal plate of the switch and the possible (can only guess from the video) metal casing in the recess in the wall. Everything metallic in an electrical installation or system that a consumer can potentially touch under normal conditions is grounded so that any short to anything metallic will immediately trigger protective devices to trip the instant the fault occur. This is true even in the case of the replacement switch in the video that has a plastic plate. In this case even both the screws need to be grounded and this is provided by the Green wire in the video. 

This is not an exaggeration. If there is no ground wire protruding from the wall, your best bet is to ground it to the socket and hope that the socket may be somehow grounded somewhere either by a conduit or other metallic object that itself is bonded to Earth. If the socket itself is not grounded and there happens to be a short from a live wire to the metal screws in the new switch plate, since it's normally covered (the 2 screws) by an additional layer of plastic switch plate, it prevents them from being touched by the consumer. However should a consumer open the plate and touch the screws, he or she will be 'screwed'. They will be shocked and likely at a level that will kill them but will not trigger any protective devices in the case of the video as the fuse box doesn't seem to indicate the presence of a  ground fault circuit interrupter (GFCI) or Residual Current Device (RCD). If there is either a GFCI or RCD installed, they will trip and cut-off the circuit the moment someone touches the screw that's shorted to live wire. This will still deliver a shock to the person but hopefully the person survives. For the case of the old switch plate, it will be extremely dangerous if there is a short between live to the metallic switchplate and no GFCI or RCD installed. Everyone should invest in at least one for the whole house by hiring a qualified person to install it in their home if one isn't already installed.

Safety

You cannot ground to the "socket", which is what the bulb screws into.  That would be a "dead short".

The BOX should itself be grounded either by a separate wire or through conduit to the main building ground.  If it is not, contact a qualified electrician.  The green ground wire on the switch shown should be attached with a separate screw to the back of the box, or with a special grounding clip to the side of the box.  The frame of the modular switch technically grounds the switch to the box, up until the ground would most likely be needed, when the switch is loose from the box in someone's hands.  So yes it is there for a reason and should always be used.  

There is a book that is quite helpful for many of these questions called "Wiring Simplified".  I highly recommend you familiarize yourself with this book before ever attempting electrical work of any type.  If you are not ABSOLUTELY CERTAIN you know what you are doing, leave it to the pros. 

So what happens if we don’t use a switch?

Nothing, except that you won’t have a basic interface with which to turn it off.

Some products are made this way; we've got smoke alarms in the place where I work that have no off switch on the devices themselves. If the power goes out, they’re coupled to a UPS that can last for a couple of hours and by that time everybody will have been sent home anyway as with no power we can’t do any work. None of them have an off switch for the simple reason that we don’t want anybody switching them off accidentally; the only way to switch them off is to disconnect them from the UPS. We also have WAPs sixty feet up on the ceiling that don’t have power switches and are restarted remotely.