new switch first, and replace any melted wires. indicator shouldntr be effected but who knows what has also been damaged by that melted brown wire...
disconnect the dim dip resistor as this is a possible cause of the melted brown wire, its near driver side headlights looks like a packet o polos with a yellow wire out of each end. follow the wires up to 2 pin plug and disconnect.
there are several mk2 headlight switches available depending on what year your car is, so match the number of pins on the replacement switch to what you have.
Once you do get a ereplacement switch invest in a relayed lighting loom, this should help increase the liffe of the headlight switch as they can just fail with age, since all the current for the headlights passes thru it they can overheat and melt inside.