What is that switch for and would it hurt the trans if I drive with the switch in the power position?

If i am right it will change your shifting. Lets say you are pulling a trailer with something heavy, switch it to power and you get your shifting changing at different RPMS. i think!

That's what I thought think it would hurt the trans to drive with out a trailer and drive it daily?

It just makes the trans shift a little harder. From what I read on here some say driving around in comfort makes the trans almost slip so you it's harder to tell it's shifting. My '88 I always rode around in power and never had an issue. I had it almost 10 yrs. You should be ok.

the "comfort" extends the shift time period on your trans causing more wear.
the "power" is what every cherokee trans is set to that doesnt have the switch

power = normal

Comfort "feathers" the clutches together, wearing them quicker, Power raises the shift points and TC lockup a little.
Jeeps after 91 (or 93?) Are permanently locked in "power".

K thanks

Can the switch be eliminated?

yes, but I dont remember what wires to tie together. Download an FSM and look it up yourself, then you can use the switch for lights or something.