easy test
disconnect ign sw connector. odds are real good the dashlights won't flash.
the crank/no crank indicates not enough power going to your relay that switches the OEM starter solenoid.
you've got a 30+ year old switch ,probably a zillion operationss on it,well past it's designed 'useful life'.
Two options, Replace or repair it.
replace. Hopefully the switch is still available ? Part number will help. From your original post keyswitch doesn't look 'weird', though a complete wiring diagram would help to see the actual fused loads on G1,G2 and ACC. A 'generic' ign sw might work.
repair. While most are 'use once,buy another'. It may be possible to open it up, clean, refurbish the contacts, reassemble. It can be a finicky job. Sometimes the grease in them flows down onto the contacts, reducing power through the contacts. Copper 'studs' wear grooves, reduces power through them,rivets holding the lugs to the studs loosen a bit, making for interrmitant connections.