A switch or hub is a LAN only device that just routes connection to any device on your local network. A router assigns IP addresses for WAN traffic as well as LAN traffic. So if you want to play online as well as LAN, get a router. A simple linksys, cisco, or netgear will be fine.
Make sure you set every computer to use the same subnet and have the router DHCP all PCs without forcing dynamic IPs (if they had one set from their own house).
Any game is fine as long as it doesnt require an internet connection like BFBC2 or SC2.
You can set a computer to host all games but if you are running a LAN, your latency wont matter since you will all be under 5ms. Only worry is if somone has a PC that cant handle being a host for the game. Should always try to use the fastest/newest PC as host just in case, or the guy who wont ragequit out of a game and make everyone else disconnect too lol.