Is the combination switch and outlet circuit in my 1970s home ok?
Every wire is there for a purpose and there are no extra wires.  

It seems like a ball of yarn because wiring is like that.   What helps a great deal is color-coding the wires by function.   As an example, I prefer


white for neutral (well, that's mandatory)
black for always-hot, circuit 1 (usually the only circuit)
red for switched-hot (between switch and lamp)
blue for alt-switched-hot (second lamp)
yellow for the two 3-way switch travelers (the ones on the brass screws) - there is no need to distinguish them from each other


Get a 5-pack of colored tape and apply that by wrapping the appropriate wires.  Yarn no more.