Easiest way to troubleshoot a neutral safety switch is to bypass it.

The switch is located in the tranny tunnel - pull the cover - it's the delta shaped device.

Unplug the switch and jump the (usually) pink wire to the (usually) blue or blue green wire in the plug. Make sure the trans is in Park, then try the starter.

There are a couple of things that can affect the NSS, the most obvious being that it can fail itself. However, a loose shifter that fails to fully engage the switching mechanism in the switch can simulate a switch failure.

One other symptom of a failed or failing NSS is no reverse lights - the switch for those is in there, too, with a (usually) blue red wire bringing the power in and a (usually) black wire taking the power out of the switch and to the reverse lights.

I just replaced one in my daughter's 89 740, took fifteen minutes. I think the part runs about fifty bucks.