Brown is usually unfused, unswitched 12V. Be careful of that lose wire...it could be connected directly to the battery, which will be bad news if it touches the bodywork. Do you have a multimeter you could use to check whether it's live or not? The end of the insulation looks blackened...is it charred?
Regarding the extra wire on the new indicator switch...really not sure what it's for - feed for headlights, maybe? Your old switch really doesn't have one?