A “blech” is a sheet of metal that covers an entire range top, on which there will usually be one open flame. Items can be placed anywhere on it to stay warm if they are already warm and fully cooked, and there are various restrictions on placing cool items too close to the flame.
Basically, the only cooking not allowed on Sabbath according to pure Torah law is to make raw items cooked, and no problem with warming items that are already fully cooked. But the Rabbis decreed that warming up fully cooked items should also not be done on the Sabbath since it’s too easy to make a mistake in the matter. However, if one covers the flame, then that serves as a reminder that will help avoid transgressing the Biblical prohibition. (This is, obviously, an oversimplification.)
The reason is a concept in Jewish law called “grama”, which basically means “indirect cause.” (again, oversimplifying in the following) There is no prohibition in doing an action which will be an indirect cause of forbidden Sabbath work getting done. However, something is not considered “grama” if it is a positive action which will defnitely result in the prohibition being done.
The switch in question circumvents this (IIRC) by being a negative action, not a positive action. The classic halachic example of this is if a deer is inside someone’s house with the door open. To actually close the door would result in the forbidden Sabbath work of trapping the animal. However, if it’s a windy day, and the door is being kept open only by a doorstop, then removing the doorstop is not considered to be a forbidden act of trapping. One is allowing the wind, at some undetermined time, to slam the door shut, but his action did not directly contribute to the shutting of the door and there was no certainty that it would happen.
Inside this switch is actually a light beam which is being blocked. pressing the switch will remove the blockage (as the doorstop in the above example) and allow the light beam to render the circuit complete. However, if the light beam was steady, or emitted on a steady schedule, then the completion of the circuit is considered a direct result. By randomizing the light beam’s schedule, the element of certainty is removed (like the wind in the above example).
You are correct in both of those assumptions. And you can’t put the food into the oven to warm even if you don’t adjust the temperature because of the Rabbinic prohibition mentioned in the first portion of this post…there is (as far as I know; there are, however, more knowledgeable dopers than I on the board. Hopefully IzzyR will check in) no equivalent to that “blech” for the inside of the oven.
And yes, a lot of the above is legalistic sophistry. But it’s also legitimate Jewish law, so…big deal. What’s permitted by technicality is still permitted.