How does Schengen multiple entry visa work?
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You want clarification of text in the Practical modalities for lodging an application which says...
Applications shall be lodged no more than three months before the start of the intended visit. Holders of a multiple-entry visa may lodge the application before the expiry of the visa valid for a period of at least six months.
If a person holds a multiple-entry Schengen that was issued for a period of longer than 6 months, e.g., 2 years, they can make a new application no more than three months before their visa expires (rather than three months prior to their intended visit).
So the second sentence modifies the first sentence to include people who already hold multiple entry visas, because the words 'three months prior to their intended visit' do not work in that context.
Your other questions...
Is my understanding correct? What is the usual duration for tour / family visit purpose granted under multiple entry?
Your understanding is correct. There is no 'usual duration'. They evaluate what they are comfortable issuing based on the credibility and performance history of the applicant. However, they will never issue a 5 year visa without some bona fide performance on a 2 year visa and so on.
Last but not the least, if applying for multiple, should I indicate possible travel in other schengen countries (other than main destination), or just port of entry - main visiting schengen country?
What to indicate... You define your itinerary first. Then you inspect your itinerary to see if there are other Schengan locales involved and then disclose it on your application. Trying to tailor what to put down invites problems because it can make the application 'incoherent'. It can also screw up future applications by deciding you are a less reliable applicant. It can also cause problems with the border guards. We have examples of all of these cases in the archives here.
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Source: stackoverflow.com
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