So what would be the general purpose/use of N-Air, as quite frankly it seems like it has a lot of weaknesses?
BTW does it have the same ending lag as landing when used in the air?
N-Air has the same lag as long as you land before the move ends, if you wait for the last hit then there's no lag at all whether you land it or not (but you won't be able to follow up since it sends your opponent away). A completely aerial N-Air is actually very lagless, if you're double jumping most of the time you can get a combo out of it.
But depending on where you catch your opponent with the N-Air (and if the have a sex kick) sometimes they can DI out of 1 hit of the N-Air, which is enough to N-Air you in the face (Mario, Luigi, Sheik, Link, etc). So be wary of opponents who might try to do that. I saw this video of Trela vs a Sheik where he kept getting punished by Sheik's N-Air even though he landed his own N-Air. I do think though that this is completely dependent on where your opponent is when you hit him the first time and how Mewtwo is moving through the air (+ opponent DIng in an specific way).
The technique shown in the video, I can't do it consistently, but it's still good. It's not an assured combo as the opponent has frame advantage but most of the time you'll be able to react to it faster than your opponent. The better your opponent though, the more useless the technique will become.
I use N-Air as several things:
1-) Anti-Air.
I use Full Hop FF N-Airs or SH (Non-fast falled) N-Airs to intercept my opponent in the air if it's too obvious that he will approach me aerially, but I make sure to get that last hit in (so I have no lag and don't get punished).
2-) Spacing myself.
Since N-Air is a multi-hit move, you can start the move inside your opponent (or space it perfectly too) and then move away. If your opponent shields the first hit you can safely get away from him and avoid any punish. I normally use it in this way when my opponent is too close for comfort and I am unsure what he will do.
N-Air is probably one of the safest options as Grab can be beaten by an attack, Shield can be beaten by grabs and an Attack can be beaten by shield. SH retreating N-Air beats dodges and attacks and is nigh unpunisheable by anything except projectiles if your opponent decides to shield it. I also use it a lot for just regular spacing but I use more F-Air for that.
3-) Cross Ups and Mix Ups.
I do N-Air a lot when doing cross ups. I make sure to land outside of grab range when doing this and normally this isn't very dangerous as N-Air doesn't have much lag, so you are able to run away from most tilt's/smashes.
I also use it as a mix up when my opponent is expecting some other aerial and might drop shield early or attack with some laggy move or... air dodge...
That reminds me... N-Air is great for catching air dodges, and get ups and ledge get ups since it's a lingering hitbox
4-) Punishing Rolls.
I want to punish rolls with something much more rewarding (like a jab or D-Tilt which can lead into combos) but most of the time Mewtwo's body is so big that it makes "calculating" whether your opponent will end up in front or behind you harder than it should be (and sometimes opponents end up inside Mewtwo at a range that Mewtwo CANNOT jab, grab or D-Tilt as it all misses because the opponent is too close, which is complete bull**** but w/e).
N-Air is the "safe and easy" roll punisher since it requires no timing or spacing, after your opponent rolls you can adjust the spacing and the lingering hitbox makes it so you don't have to time it correctly. That said if you can tell exactly where your opponent will end up probably the best punish is a jab combo or a smash if they end up in front of you and a Disable if they end up behind you (which can lead into whatever you want, including charged smashes).
Apart from that I don't think N-Air is that great. The technique in the video is kinda ok I guess. I always try to follow up my N-Airs when I land, just in case I get them but honestly I end up missing more than half of the follow ups due to spacing or w/e and I get punished myself with jabs when my opponent is fast on his feet so trying to follow up normally does me more bad than good.
Still I think that just like Confusion or D-Throw, FF N-Air has some uses in the sense that you can try and get a reaction from your opponent and then punish that reaction.