You basically learn by trial and error with crimping. After the first 50 or so you will get the hang of it.
Here's what I do. I strip the wire enough so that when I put it in the connector's hole and put it up to the red edge on top, it is not showing at the bottom of the connector hole you just put it in. You will get the hang of this as you crimp more and more connectors.
Once measured and stripped, I usually put the crimp itself into the crimper first (loosely, don't crimp down just yet), this allows the other hand to be free to put the wire in the crimper all in one motion. Then I put the wire in (or wires in if you are daisy chaining) until it just peeks out from the top of the red casing of the connector. You want to crimp down on the skinnier part of the red casing (if you examine it closely, you will see that the metal part of the connector does not go past the part that get bigger on the connector's red casing. It's pointless to crimp the whole thing.
Then give it a quick tug to make sure it is secured properly. If it fails, don't try to re-use the connector. Throw it away and use a new one.
To put it on the microswitch, simply push it onto the connector until you hear a click and it's firmly in place. It won't always click but it will be in pretty snugly. Loose connections are not good, as they tend to fall out. It's critical that it stay firmly in place.
Last but not least, take your time! Rushed wiring leads to headaches later for troubleshooting.
P.S. - You may want to check out this video I made about wiring basics.
http://forum.arcadecontrols.com/index.php?topic=80229.0Good Luck!
~ DeLuSioNaL