I think you misunderstand how that panel works.
Everything in that list under Application Keyboard Shortcuts refers to, well, keyboard shortcuts for
menu items in specific applications. When you add something to the list, you are modifying the menu shortcut for a specific application. For example, if I decide I want Reload Page in Safari to be control-shift-1 instead of apple-r, I could add such an entry to the list.
The list is not for activating other applications as you are trying to do. Sorry...
What *can* be done, though, as I mentioned above is that you can activate the Dock (control-F3) and then navigate your apps from there. It's not as quick as a
single keystroke, but it is a keyboard-only solution for when you don't want to touch the mouse.