In the adventure path I am using, the npc enemy has a cutlass* +5 (1d6+2/18–20).
Am I reading that he gets a additional +5 to hit or is that the total to hit with their str mod and bab?
The usual meaning of a melee attack line is to give the full total of the bonus to the attack roll, because the GM is too busy to have to look up several stats and perform addition. So the +5 is the sum of the base attack bonus, the Str bonus, any enhancement bonuses, etc.
Sometimes other effects could be added later. For example, if the cutlass wielder has a Potion of Bull's Strength, and the stat block does not say that he drunk it just before combat, then he can drink it later to increase his strength and gain an additional +2 to hit and +2 to damage.
Thank you for clearing this up! I assumed that was what it was, but I was not sure if I was hamstringing my monsters by not applying it correctly.
I assume the same works for their skills?
Yes, it gives the total bonus for the skills, too. When I level up an NPC (because the NPC returned later, or because I want a more difficult encounter), I have to deduce how much of the skill bonus is from skill ranks and how much is from feats, abilities, and racial modifiers, to avoid giving more ranks than the level allows.
I found the reference how to read the stat block: Stat Block.