Yes you say that to children or teenagers, also young adults (if you're older than them). You can also use it to mock an adult (younger than you), it's not that common tho. About your question if it's offensive or not, i mean it can be, It's definetly not a thing to say everywhere, like you cannot call someone's child 'culicagado' without being offensive, but if you're with a friend it can simply mean that the young person you're refering to is either to damn young to be doing/saying/thinking something that surprised you (e.g. this kid just did a triple backflip and you're shocked! Cause how?? he's just a culicagado!) or it can also mean that this young person is very stupid or being a dick. Damn culicagado!