I think those are actually the same switch, in two locations (to make it easier to find). If you turn it off in one location, then look in the other you'll see that it's off there as well.
Anyway, I was able to get iTunes Match mostly working again by doing the following:
1. Force the Music app to exit - double-tap the "home" button to bring up the recent apps, touch and hold the music app until it starts wiggling, then tap the "x"
2. Go to settings and turn iTunes Match off.
3. Wait at least a minute.
4. Turn iTunes Match on.
5. Wait at least 5 minutes - this is the important step, my theory is that iTunes Match just needs a little time to sync up before you try to use it.
6. Start up the Music app. You should see all your music now.
If you do step 6 before waiting long enough, I think the Music app reads a partial music library, and gets a bit confused. It would probably catch up at some point, but who knows how long that might take.
Many "smart" playlists still don't seem to be working properly, and they'll likely still be empty after you do this. There's an iTunes update coming out in October, I'm willing to bet that what we have right now is only the first 1/2 of an update, and when iTunes brings us the other half, the smart playlists will start working properly.