It depends on your needs. Either wire the switch between s1 and s2, or between Line and s2

Yes, that’s basically right. Matter is the home automation API and pairing/security specification, and it uses IP for communication. WiFi and Thread are the officially supported IP communication layers. One other detail is that Matter uses Bluetooth for pairing & onboarding, before switching to Thread or WiFi for communication. So you don’t have the inclusion/pairing/etc setup from other low-power radio systems like Zigbee or Z-wave. That’s all it uses Bluetooth for, though, but some people seem to get hung up on that and think it brings Bluetooth’s many shortcomings along, when it really doesn’t.