Small circuit board issue
Please forget about the switch 1.It's not connected anywhere.Come to the point of switch 2.The L and N stands for Line and Neural in the AC power supply,which you get in your home.Current flow from Line to Neutral.The MB10S,as you said is a bridge rectifier. A bridge rectifier will convert an AC current to pulsating DC current.In AC current we use Line and Neutral,in DC current,as you know,we represent +ve and -ve terminals.Your output to the fan may be a DC motor,so you use a AC to DC converter like the bridge rectifier.But actually,this circuit is supposed to work.Make sure that the AC input given voltage limited(below the maximum voltage that bridge rectifier can tolerate and work fine).Otherwise,the rectifier will burn or damage.You can find the line and neutral by using a tester.If you put the tester in Line,The LED inside will glow.If it's neutral,the LED wont glow.In your PCB,add a capacitor in-between the +ve and -Ve output parallel to the output to stablise the DC current and so that you can get almost a good DC voltage.The capacitor will eliminate the ripples from the rectifier(the smoothing of pulsating DC voltage) and you'll get a better DC current.The more capacitance you add,that much ripples are eliminated. Use a step down transformer to the L and N point of the PCB like 9-0-9 V transformer or 12-0-12 V.I don't find anything wrong with this circuit. If you think to control also by switch 1 solder the switch 1's L to switch 2 L.Also for the N wire also.Here is the picture