Fuse and AWG choice for immersion heater circuit
In the US and Canada most 120 volt outlets will be protected by a 15 amp circuit breaker and wired with #14 wire, although 20 Amp circuits with #12 wire may also be used.  There should be no need for your Fuse 2, but there is no harm in having it.  The fuse should be at least 15 Amp - if the fuse rating is too close to the normal load, then it may blow for no real reason.

All fusing and switching must be in the "hot" wire to ensure that the circuit following the switch or fuse is dead when the switch is off or the fuse is blown.