I don't have a lot of time now, but just a few thoughts:
If he presented himself to the Rabbi as a non-Jew looking to convert, I would expect a lukewarm response at best. This is because Judaism does not proselytize, and is not interested in accepting converts unless they are strongly motivated to join the Jewish people and accept all of the responsibilities that this entails. Thus, potential converts are traditionally turned away several times to ensure that they are sincere and determined to convert.
However, if he goes back and explains that he is a Jew, because his mother is a Jew, and that he would very much like to learn more about Judaism and become a part of the Jewish community, he might receive a very different response.
He is, by the way, 100% Jewish already. Judaism is determined by one's mother, not one's father or knowledge/practice.
There is no shame in his background - on the contrary, he is a "lost soul" finding his way home, a small victory over Hitler and his attempt to eradicate the Jews.
It is theoretically possible to "live Jewish" by oneself, but highly unpleasant, undesirable, and impractical.
I'm sure that there is more than one Orthodox Rabbi in Switzerland, and even though all Orthodox Jews seem the same from the outside, there are actually differences between them (ideologically, lifestyle-wise, and personal personality differences). He can try contacting several Swiss Rabbis - hopefully even if some are less than supportive, others will be helpful. If he doesn't find the Jewish community in Switzerland to be receptive to him (and this would be a bad reflection on THEM, not on him) he should consider reaching out to Rabbis by e-mail or phone. There are Jews all over the world, not just in Switzerland, and in this age of instant communication, it shouldn't be too hard to connect to them.
For starters, he could start with the following. Hopefully they would be able to direct him to more people/resources closer to home, and perhaps recommend some reading material.
Rabbi Danny Kirsch
The Jewish Learning Exchange
152 Golders Green Road
London NW11 8HE
Tel: +44 (0)20 8458-4588
Fax: +44 (0)20 8458-4587
E-mail: firstname.lastname@example.org Home Page: www.jle.org.uk
Here's the contact information for the Aish branch in Manchester, England: email@example.com
Aish is a worldwide organization dedicated to helping Jews reconnect with their heritage. Your friend might enjoy their website, http://www.aish.com/
Here's another one:
She and her husband run a program in Cleveland, Ohio (that's in the United States) helping teach Jews about their heritage.
I give your friend my most heartfelt wishes for success from the bottom of my heart. I feel like I've just discovered a cousin that I didn't know I had, and I very much hope that he persists in his efforts to re-connect with our family! It might be a bit hard at the beginning, as he tries to find the right Rabbi/community for himself, but there are many, many Jews out there rooting for his success and waiting for him with open arms. I beg of him to find them - because we are here!