How to figure out max Watt rating for transfer switch?
TLDR: Any Honda generator will be safe, but if the gen is larger than about 7200W it will need a 30A breaker on the supply socket.  You will probably want all of 7000W based on the loads you named so far, but what loads you serve with this is up to you. Clever choices could reduce generator need. 

The switch's labeling says 30A capacity.  That looks like a NEMA 14-30 inlet which again is 30A. 

30A x 240V = 7200 watts.  

This thing is a subpanel without a main breaker, and that requires a breaker on its supply (supplies).  Amp-changing (50A-30A) cheater cords are illegal, so this  30A inlet plugs into a 30A outlet on the generator. That outlet must have a 30A breaker on it to protect the power cable to this panel, and this panel itself. 

As long as the generator provides 30A protection, it can be any size, even 1000A. That's a bit of poetic license. You won't find generators that big on the market, any 240KW generator would make 480 3-phase or higher and use transformers to provision 120/240 loads. 

A &lt;=7200W generator is fine. The generator's inability to supply more than 30A will suffice as overcurrent protection: those won't need a supply breaker.  Note Honda is remarketing this panel, they make small consumer tier generators and any of those would suit. 

Each of the 10 circuits has a 15A breaker, so even if it's a 20A circuit it is protected at 15A in this thing. However the wire from the main to this panel is not protected at 15A as it should be, so change out those supply breakers to 15A. 

You don't seem to be clear on which circuits are powered through this subpanel.  That's kind of a problem.  Not only should you know... It should be your decision.  The loads you choose largely decide how much generator you need.  

The choices made so far are fairly piggy (the microwave is a fat load to be sure, and the water heater is humongous unless it's gas), necessitating a large generator.  A thoughtful person could make make careful, compromise choices and reduce the needed generator size considerably.