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Q1.  The subject of deliverance is grossly misunderstood in
Christendom and I too am not fully established in it. In one of your
previous responses you said that some Christians are bogged down by
the doctrine of generational curses and end up wasting their energies
in fighting these "curses."  You said that one must stand on 2
Corinthians 5:17 and they would be totally free from such curses. Does
this apply to every generational sin/weakness?

Yes, if they have the faith level and teaching level to do so. It is
like the understanding about eating vegetables (Romans 14) and eating
of idol food in the markets (1 Corinthians 8 - although there is also
an area where one does not do it because it involves false worship - 1
Corinthians 10:20, 21). Some of the methodology of helping people from
generational curses have NO NEW TESTAMENT examples or Scriptural
basis. The closest that one can find is in Acts 8 where Simeon the
former magician now converted still had the 'root of bitterness' in
him (he would be a prime example of one who had a past of idolatry,
witchcraft, magic) and he was told to 'repent' rather than to
'renounce generational curses.' Like Romans 14:23 says, what is not of
faith is sin. When a person is taught or from his background believes
that eating vegetables enhances his spirituality or keeping a certain
day a week enhances their spirituality, then it does for them for they
would receive according to their level of faith. If a person is taught
that their problems came from generational curses (rather than a lack
of faith or knowledge) or has a culture that believes that such can
continue to cause problems, then the person would receive according to
what they believe - and needs to be freed accordingly. The methodology
is always adapted to the person's faith level. At times Jesus wanted
to lay hands and heal but a greater faith level (Luke 7:9) changes the
methodology. The key principle is this 'the method of healing or
deliverance or reception of any promises of God is always dependent on
the faith level of the recipient.'

Q2.  I will create a little scenario to illustrate my point (it is not
a total fabrication of my mind).  A young man in a family dedicated to
Satan gets born-again.  His siblings are into occultism.  Practising
witchcraft has been a family tradition and the family is an
established "principality" in a certain territory.

a)      If this young man stands on 2 Corinthians 5:17 will this
suffice?

Faith grows according to Romans 10:17. The person must not just be
taught 2 Corinthians 5:17 (it can be used as a base) but must also be
taught his authority as a son of God and the indwelling of the Holy
Spirit - and anything else that would helped him grow in faith. The
right teaching is very important. Like everything else in life, it
might take time before the teaching holds in his heart and become
manifestedly true in reality as he faith takes hold of the revelation.
Sometimes, constant teaching is needed before faith understands and
takes hold of the revelation.

b)      Does he need to engage in spiritual warfare to uproot the
witchcraft altars in his family like Josiah?

If he has faith, he can rest in the finished work of Christ for him.
Jesus has conquered satan and all his prinicpalities (Hebrews 2:14,
15; Colossians 2:15), he can receive the love of Jesus and become MORE
than a conqueror (Romans 8:37). If he believes it and receives it as
Scripture says, than 2 Corinthians 5:17 works for him and he needs to
do nothing else. If in his mind he assents but within his heart he
still feels that he needs to renounce, then doing so might help
release his faith at his level and bring some relief to him. But in
the end for permanent walk of authority and power, he would still
ultimately need the revelation of WHO Jesus is, WHAT Jesus has done,
and WHO HE IS IN CHRIST.

c)      Considering that his forefathers and his family members have
been bewitching people will God bring judgment on his family?  If yes,
what must he do?

It does not matter what the family has done, each one in the NT only
answers for his own sin. In the NT, God deals with both the personal
sin and the inherited sin nature at the cross of calvary. Of course,
where the consequences of sin of the forefathers still hurt people,
the release of forgiveness is an important part of releasing the love
of God into the situation.