Is my hot water circulation pump plumbed correctly?
To awnser your first question I would advise checking your local plumbing and electrical code before relocating the switch as it may be required to be within sight of the pump (this is so a service tech can easily see that the powers is off and no one has turned it on when they weren't looking) Instead you could add another switch in series and locate that beside the heater.

Isolation valves are always a good idea (as you said for future service work)

Instead of getting a pump with a thermostat built into it you could buy a clip-on aquastat and mount that on the copper piping in the kitchen and run a cable back to the pump as it may be cheaper. And then there will be no need for a timer.

For your second question there should (hopefully) already be a check valve after the pump but before the tee fitting


This is to prevent the cold water going back through the pump (one this will make your hot water cold as you said and two it can spin the impeller backwards and damage the motor). If there is one it might be worn down and have failed in which case you will need to replace it. If there isn't one then you might want to add one.