this switch is used to adjust headlights up and down. so to test the switch , turn the headlights on , then move this switch fully upward i mean 0 to 5 and keep your eye on headlights if they move downward , the switch is ok. and if you move the witch 5 to 0 the headlights will move upward.
NOTE: switch will only work with headlights ON.
and for the hole , it is for towing the car.