Sounds like neck pickup is microphonic
As far as the squealing is concerned it could be that the cover on the neck pickup is loose and vibrating when you play loud. The pickup then picksup the vibrations and they get amplified and you have microphonic feedback. You need to make sure that cover is secure.
You can try bending the tabs on the bottom of the pickup to tighten the cover on the pickup.
If that doesnt do it there are some other tricks you can do like take the cover off and drip some wax into the inside of the cover and then put it back on the pickup. If all else fails you can "pot" the entire pickup in wax.
It sounds like those are the correct switching options for the "stock" 52 tele.
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