The selctor switch does change the pick up selectiom. Assuming you have a 5 way switch and standard wiring and single coils they go top to bottom, neck, neck+ middle, middle, middle bridge, bridge. How usable all positions are depends on the guitar and quality of the pickups.
Humbuckers have, usually a 3 way switch. Neck, neck+ bridge, bridge. If you have a splitter or coil tap you can mimic a single coil or blend combinations of humbucker and single coils to add various tones.
The neck and neck middle are good for cleaner lead tones. In my opinion the rest are basically a matter of taste. You get a darker chunkier sound with the other positions.
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