The water hammer, which is a hydraulic shock, is usually the result of resonant shock loads in a non-compressible fluid medium.

The air disapates that shock (while having other consequences). In our boats, hoses some "relief" vs. hard pipes; and we have usually lower pressures than most domestic systems; there, water hammer isn't the problem that it can be in buildings or industrial situations. (http://en.wikipedia.org/wiki/Water_hammer)

The problem with the air in the lines is that it "fools" the pressure switch because air is compressible and the water (for our purposes) is not. You need enough "omph" to get the pressure switch to trip. Failure to do so can be the result of i) air in the lines, ii) a leak in the pump or elsewhere, or iii) inadequate voltage to get the pump to perform as designed. Of course, a bad pressure switch can be the answer. Chlorine treatment, corrision, and just age would be my guess for the culprit for switch deterioration.

In over twenty-five years (10 on our Sabre, and 15 on our current J/Boat), I have yet to have a Surflo pressure switch malfunction. In fact, neither of the Surflo's that I replaced the old PAR reciprocating pumps with has ever failed. They used to cost about the same of less than a rebuild kit for the old fashioned PAR's. Now they're a bit more -- but not that much more.

Johnson makes a pretty good pump too. It's supposedly quieter and it is a little less expensive. Jabsco makes some good pumps too -- which have some features on them.

Practical Sailor did an article on these in 2011, I recall.