The VSS (Vehicle Speed Sensor) is just that, it tells the ECU the vehicles speed, I had to do a quick google as it was over ten years ago when I looked into this ...found this that might help on RedlineGTI...
the only purpose of the vss in the gti is to control the idle solenoid valve
Yes, it is a simple reed switch. You could buy one for pennies, stick it as close as you can to the disc / magnet that rotates inside your speedo and it will function the same as the Suzuki OEM one. Easy to test and set-up with a multimeter, as it's just an on/off circuit.
I used the complete swift loom and dash cluster, just attached the mini lights and wiper to that loom, but thats of little help to you I suspect.