Can't have a loose wire
"14/2" means a black, white and bare wire wrapped in a sheath. "14/3" is the same except it also has a red wire inside the sheath.
If the red wire is outside the sheath, loose or tacked on, then it cannot be used. At all. This is a totally improper wiring technique. Cap it with a wire-nut and tape, and push it into the back of the box. At the service panel end, just cut it - it is useless. Whoever installed it did very bad work, and all the other work in the house should be reviewed against Code.
I know what he was trying to do, but you can't do that - so no point getting into the gory details.
Pigtails are fine
It's fine if circuits are pig-tailed with wire nuts and short lengths of wire to the receptacle. That is a totally acceptable wiring method.
A workaround: put it all on a single circuit
The simplest thing is simply to wire everything onto a single circuit. It's not good, it would certainly not meet new-build or remodel standards, but it is better than he had it.
When possible, you should pull at least two more 12 AWG/20A circuits, preferably three, and spread the loads out among them. Then retire the 15A/14AWG circuit, or dedicate it to a single thing such as the refrigerator.
Two ways to GFCI
You can install a GFCI breaker inside the panel. That will protect everything on that circuit. You must use a 15A breaker because there is any 14 AWG wire in the circuit.
Or, you can install a GFCI receptacle there at the switch. You can decide which additional loads you would like to GFCI-protect by attaching them to the LOAD side of the GFCI. If you put a "hot" on the GFCI LOAD terminal, you must also put its companion "neutral" also. You may end up with 2 wire-nuts with 2 groups of neutrals: the unprotected and the protected. If a hot goes through the GFCI and a neutral does not (or vice versa), the GFCI will trip.
Yes, that's totally fine. What you are proposing is called a multi-wire branch circuit in 120/240 split-phase. They are falling out of favor because protecting them with GFCI or AFCI is a challenge. You must either
- fork the circuit and place AFCI/GFCI after the split; or
- use an expensive 2-pole GFCI device. This is the option you are proposing. And that is fine.
A 2-pole GFCI is built the same as a 1-pole GFCI, it just has 3 wires going around its magnetic sensing core instead of two. All current heading out on L1 must return via either L2 or N. Current flowing out on N must return via L2. Since all 3 wires are wrapped around the magnetic core, each combination causes equal and opposite magnetic flux, which cancel each other out.
After working with 1-pole GFCIs for awhile, ones armchair kneejerk may be to say "that can't work". Take the time to diagram it out and think it through. It works fine.
Best Answer
Switches are not circuit breakers (overcurrent protection). They cannot protect wire and do not make it ok to use smaller wire past them.
If any 14AWG wire is used, you must downgrade the breaker to 15A, and downgrade the countertop receptacles to 15A. The other wire can remain 12AWG. This will mean it is not one of the two mandatory 20A circuits for countertop receptacles and you may need to add a circuit.
There is another reason not to put kitchen lights on receptacle circuits. An appliance trip will plunge the cook into darkness.