Basics of Encryption and decryption

[fullmetalcoder]

1) Suppose there is a hacker who knows the passpharse of string and even know what alogorithm was used to encrypt it ( DefaultEncryptorWithMAC in above case). Is it possible for the hacker to decrypt the string with above information(only passpharse and algorithm used) ?

If he has the same program as you or know how to write it it won't be a problem... Actually he might not even need such a program if he is as good as jacek...

2) What do I call the logic part written above in technical terms? Suppose I want to explain my peers about how I used the logic to encrypt and decrypt the files. Is this what you call 'seed'?

A seed is generally used to qualify an element of a random number generator but also has many other meanings... Your peers won't necessarily have knowledge of C++ programming and probably won't be willing to build the encyption/decryption program themselve (would they be able to do it and would they have proper tools...)

3) I will encrypt a file with say AES::CBC mode and use passpharse 'hello123'. Now I have a friend in Poland whom I send the file by an attachment. I even reveal my passpharse and algorithm used (AES::CBC) but not the logic I have written to encode. Is it possible for my friend to decrypt the file using crypto++ lib?

Sure but, again, he will need some knowledge of C++, crypto++ and all the tools needed (i.e. compiler toolchain, library installed, ...) so this is probably not the right way to go...