Is replacing Immersion Heater element necessary if central heating always done by oil?

You're not going to like my reply, the simple answer to your issue is that if you don't know enough about a switch panel that's about 30 years old, you shouldn't be in there, and that's without the specific legal implications of modern regulations that are a lot more restrictive than they used to be, in order to protect people from dangerous changes done by "mates" to help out.

In situations like this, the internet is NOT your friend, as there are way too many supposed guides on how to do things that are fundamentally dangerous, because they are not specific to a manufacturer, or system, and using a guide for another make or system can result in a dangerous result, the copper bar you mention is indeed a distributor, and in the wrong circumstances, it can be live when you don't expect it to be, so if you are not 100% sure of what you're working with, then the ONLY safe route is an electrician that's approved to do the work you need done.

I'm not a registered electrician, but I know more than enough about what's involved, because i had to do similar, and more complex, back when the regulations didn't exist, and I wired my own house in the UK back in the 70's, among other things, and in those times, there was no self certification, it had to be signed off by the electricity supply company before it could be connected, and there was no flexibility with them.

Please, for your own safety, get some professional help in to resolve this, it's not a run of the mill fault, so it needs to be accurately diagnosed with specialised test equipment that will be able to isolate the faulty item or wire, and make sure that the repair is good.