What is the purpose of Curwen's altar?

What is clear from the passages quoted in the question is that a significant quantity of blood has been spilled or poured on the altar in question. That raises the question of where the blood came from; and the story provides some suggestions but no absolute answers. Not much more is known than that blood is a critical part of Joseph Curwen's project of returning to life. Ward and Curwen are overheard arguing, soon after the latter's reconstitution and just before the stories of vampirism appeared.

The youth was arguing or remonstrating hotly with himself, for there suddenly burst forth a perfectly distinguishable series of clashing shouts in differentiated tones like alternate demands and denials which caused Mrs. Ward to run upstairs and listen at the door. She could hear no more than a fragment whose only plain words were "must have it red for three months", and upon her knocking all sounds ceased at once.

... [many pages omitted]

What hellish consciousness or voice, what morbid shade or presence, had come to answer Charles Ward’s secret rites behind that locked door? Those voices heard in argument—"must have it red for three months"—Good God! Was not that just before the vampirism broke out? The rifling of Ezra Weeden’s ancient grave, and the cries later at Pawtuxet—whose mind had planned the vengeance and rediscovered the shunned seat of elder blasphemies?

It is not ever specifically clarified what the "it" that must be red is, but the subterranean altar is one possibility—although not necessarily the most obvious one. The vampiric attacks are described (by the survivors) thusly:

Both late wayfarers and sleepers with open windows were attacked, and those who lived to tell the tale spoke unanimously of a lean, lithe, leaping monster with burning eyes which fastened its teeth in the throat or upper arm and feasted ravenously.

To make the reanimation of Curwen permanent, clearly blood of some sort is needed. The most obvious interpretation is that the lich is drinking the blood of its victims directly. However, in Lovecraft's tales (such as "The Dreams in the Witch House" and "The Haunter of the Dark"), it frequently seems that the impressions of the (often foreign) urban poor are meant to be interpreted impressionistically, rather than literally. The stories that are told often capture much of the essence of what is happening, but not so much the details. In this case, it may be that some (or all) of the blood drained from the vampire's victims may have been transported to the altar for sacrificial purposes. It may not been drunk by Curwen's lich in the first place, but rather collected in a vessel; or it may have been (horrifically) regurgitated onto the altar stone. But beyond this speculation, we do not know; Dr. Willett makes no definite determination about this aspect of the situation, and so neither can we, as readers.