what happens with SWG % setting?

Your cell should go into FC production mode based on your desired output setting. Then it will run continuously for a programmed cycle (i.e. 60 minutes, 90 minutes, etc) so that it produces the amount of free chlorine request by the output. Between cycles is a rest period where the cell plates are not actively energized and/or may go into a reverse cleaning mode. The link below may help as well.

 
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Does the SWG turn the Salt Cell On/Off based upon time? Like 30% is 3 seconds on, 7 seconds off? Or perhaps the
amount of current is varied.

Even though most SWGs in the US use duty cycling to adjust the chlorine output (as already mentioned), it is also possible to adjust the chlorine output by varying the current through the cell - this is actually the more common method in Australia.

Can you see the cell working when it's on?

There is a great video in an older post that shows the gas being created in the cell (in this case showing an SWG that adjusts the current to control the chlorine output):
 
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