Power factor of a circuit represent its power delivery efficiency. It reflects the amount of current needed to deliver a specific amount of power.
Power factor can be corrected by adding an equal and opposite reactance in parallel with the original load.
Assuming we are dealing with RMS values of voltages and currents instead of the peak values shown here.
--- Switch is OFF (current = 1.41A) ---
Z_total = 85.078 Ω ∠45.152°
= 60 + j60.319 Ω
I_total = 120 / 85.078 = 1.410 A
P (consumed) = 1.410² × 60
= 119.286 W
S (apparent) = 1.410² × 85.078
= 169.144 VA
power factor = 119.286 / 169.144
= 0.705
--- Switch is ON (current = 0.994 A) ---
Z_total = 120.639 Ω ∠0.038°
= 120.64 - j0.573 Ω
I_total = 120 / 120.639 = 0.994 A
P (consumed) = 0.994² × 120.64
= 119.365 W
S (apparent) = 0.994² × 120.639
= 119.366 VA
power factor = 119.365 / 119.366
= 0.9999916
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Notice that in the first case 1.41 A is needed to deliver a true power of approximately 119 W, While only 0.994 A is needed in the second case to deliver the exact same amount of true power.
Also notice that the power factor has a direct impact on the phase angle between voltage and current (impedance phase angle), higher power factor means smaller phase shift between a circuit's voltage and current, and lower power factor means a larger shift between them.
