Electronic – Is a hard to turn shaft a sign of a bad DC motor

As Ignacio said, use a DPDT switch in an H-Bridge configuration. Also, you are just wasting power using resistors. Change to a 1.5V battery and you don't need a resistor.

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For a variation on your circuit, you could use two 1.5V batteries and stick with your SPDT switch:

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The resistors you are using are not only wasting power, but they are also limiting the current too much so that the motor will not turn.

If you must use a 9V battery, you could use a smaller value resistor per Saidoro's suggestion and put it in series with the motor. Then either use the DPDT circuit above, or the SPDT circuit with two 9V batteries.

In general, yes, because the stall current for a motor can greatly exceed the rated current, and exceed the continuous current rating of the motor's windings, brushes and commutator, and burn out the motor.

In some motors it won't instantly kill the motor but heat it - the motor will survive short overloads but can't dissipate the heat from a continuous overload. If you've been making heavy cuts with a saw or a drill it's often good practice to run the motor unloaded for a minute afterwards so the built-in fan blows cool air through it.

This excessive current under heavy load is a necessary consequence of keeping the winding resistance down to keep the motor's efficiency high under normal (high speed) operation.

Cheap motors tend to have incomplete data but for a reasonably complete specification see this datasheet and note (the first column)

"Maximum continuous current" 6A. (The nominal rating for 100% duty cycle)
"Starting current" 105A. (This is also the stall current).

Typical motors like the Mabuchi RS550 are designed for lower efficiency so the stall current may only be 6-10x the rated current (here 83A vs 10.8A at max efficiency, max continuous current is not specified).

In neither case should you mistake the stall current for the rated current : the RS550 surely cannot survive 83A at 9.6V (about 800W) for very long!

However, in your case (a motorized fader) the motor is small, low powered, probably has quite a high winding resistance and low efficiency, and may be able to survive a fairly prolonged stall. This is a deliberate design choice to limit its stall torque rather than injure a sound engineer's fingers! Alternatively its drive current may be deliberately limited. Over and above that, its controller apparently detects its drive current to detect stall or manual override, and cuts off the power before any damage can be done. It is completely safe to stall this motor by hand.