Melted switch replacement
The switch is a goner, so you'll have to replace it

What happened here was the initial connection at that screw terminal was made improperly (mistorqued), which caused it to overheat and progressively fail further until it started smelling...melty.  The good news is that you caught it soon enough that it didn't start anything serious (like a fire!).  The bad news is that the switch is toast and needs to be replaced with a new decorator-style double switch, preferably one rated for 20A.

When you replace it, you'll want to use a torque screwdriver that reads in inch-pounds to tighten the screws on the new switch to the specified torque (12-14 in-lbs, as per this Leviton specification, if your switch didn't come a number).  You'll also need to fit a grounding pigtail to the new switch, connecting it to the existing ground wire bundle in the box.