1998 Chevy Cavalier Neutral Safety Switch? Really?

Transmission problem
1998 Chevy Cavalier 4 cyl Two Wheel Drive Automatic 136k miles

Last summer I had the transmission rebuilt; recently, it has not been shifting as smoothly, it's been dropping abruptly (kinda like a racecar), and getting more and more noticeable. The transmission rebuild is still under warranty, so I took it back in. The mechanic drove it and thought the tranny was still fine, but "maybe it's an engine problem." He was shifting in and out of "3" and "D" while driving. As I drove away, it would no longer shift into gear! Rev'd up to 3-4k RPMs and only going 20mph. I took it right back. Now he says the Neutral Safety Switch is worn out and must be replaced.

1) I thought the Neutral Safety Switch is part of the starter system. The car starts just fine, it's just not shifting on its own. (If you manually put it in 3rd it will go. But it won't go into higher gears when it's in Drive.) Does this diagnosis make sense?

2) Is this something that "just breaks" or did he break it? It was not doing it before!


Thanks for your help.