What is this strange coiled wire and should everything be redone?
This should definitely be redone with a standard 14/3 NM-B cable

Whoever installed this lightswitch used the first thing they could get their hands on, apparently SPT-2 parallel cordage of some sort, instead of NM cable.  As a result, there is no ground in this box at the moment, nor is their a neutral, which is now a requirement to provide at switch locations to accommodate smart switches and such.

As a result, the entire cable that connects this switch to the fixture it controls needs to be replaced with a 14/3 NM cable -- black goes to always-hot in the vent-fan box, red goes to the vent fan hot, white goes in with the neutral bundle that the fan connects to, and bare goes to the ground bundle.  In the switch box, bare goes to the green ground screw on the switch, black goes to one switch terminal, red goes to the other switch terminal, and white simply gets capped off with a wirenut as it's not used for a "dumb" mechanical switch that simply sits in the circuit hot and breaks it.

This is also a sign of further trouble lurking

This sort of sloppy work in one place means one thing: that there's probably more trouble lurking where you cannot see.  Do not be surprised if you see more flagrant Code violations during further work.  If you have a friendly electrician at hand, you may wish to call them in and go on a Code-violation scavenger hunt through your house with them, even.