While disclosing mortgage details, in box2 it says "Box 2 - Outstanding mortgage principal as of 1/1/2018" Shouldnt this be 2019?

No, you are doing your 2018 taxes and the IRS instructions are to enter the 1/1/2018 outstanding mortgage principal. 

Per IRS 1098 Mortgage Instructions Box 2. Outstanding Mortgage Principal as of 1/1/2018 Enter the amount of outstanding principal on the mortgage as of January 1, 2018. If the mortgage originated during 2018 or you acquired the mortgage during 2018, leave this box blank.

I took a loan in May 2018 and when I mention nothing in the box, it does not take interest paid into consideration for deduction and refund. Am I not understanding the rule correctly? Should not I be receiving tax credit for interest paid between May to Dec?