My A501s are all fully enclosed in sheilding as you describe. The shielding seems to be a "cover their butts" measure for Commodore with the FCC. I've never noticed interferance without the shielding except near a shortwave reciever.
Even though my A500s all came with 1 Meg Agnus chips, they would only address 512 K of true chip ram on the motherboard. The A501 was mapped as "slow-fast" ram in the stock configuration. I changed all of my machines to 1 Meg, except one I changed to 2 Megs of chip.
Maybe someone modified your motherboard for 1 Meg of true chip ram and made the notation on the A501.
I doubt the switch is a stock part. What is the switch wired to?