As you can see, there are a number of possibilities for use of a dual battery switch. But let's consider "your" role in this. Only you can figure out what your outbound, inbound, storage, and day/hours on the water will be. But before I get into this, let's visit a couple of things already covered.
1) You need a dual output charger (6+ amps on each output) on the boat so you can plug into AC power at the end of each day. Smart chargers can be left plugged in indefinitely without damage to the batteries. If AC power is not available at the dock or slip examine other alternatives.
2) It was suggested that you "never" switch with the engine running as you may damage the alternator. That is true ONLY if the switch is of an older design that is NOT a make-before-break design. With most modern switches the new connection is made before the existing connection is broken. What you do not want to do is select OFF with the engine running as that may damage the alternator as it becomes immediately unloaded.
3) Although you can never have too much battery power available, for your boat you really don't need a third battery in my opinion unless you have ample room and added weight is not an issue. A jump start box may be an nice portable option for security. Just remember to keep it charged.
While you may already have the idea that when the switch is set to "1" that battery is the only battery in the system and when set to "2" it is the only battery in the system. ALL means both batteries are in the system and as such they together act as one giant battery. Big batteries take longer to charge than smaller ones so using the ALL position anytime you are underway may or may not be the best selection.
Consider this -- when one battery is discharged more deeply than the other, why not set the switch to that battery when under way so that battery can be charged faster than if the ALL position was selected. As was also pointed out earlier, it is highly unlikely either battery can be fully charged unless you ran for hours at a time under wide open throttle.
Also consider that IF you do have an on-board charger, when you leave the dock/slip you know both batteries are fully charged (provided the charger was plugged in of course.) So select either of the two batteries, start the engine, leave the switch alone and run to your destination. The engine can then charge the battery you used to start the engine which at this point is the most deeply discharged although minimally. Understand that an engine properly tuned could be started may dozens of times without being charged at all. In the good old early days of electric start, there were no charging systems. My old wood Thompson with a 35 HP Evinrude would run nearly all summer without being charged. One can argue that under the same conditions but in the ALL position the other battery would not be taking much of a charge so the bulk of the available charge would go to the more discharged battery.
Basically, the ALL position is provided to give you the option of combining both batteries to provide a better chance of getting the engine started if one battery cannot do the job by itself. Again, proper battery maintenance and charging techniques go a long way to avoiding electrical problems on the water. I'm certainly not implying never to use the ALL setting but I am suggesting that you do not need to constantly fiddle with the switch. You need to act as the traffic cop for the charging system. Make yourself the least busy as possible realizing that the engine only has so much charging capability.
