I don't really expect a prequel. Ford's adamant stance on playing the character's appropriate age keeps them from going back too far. He could always change his mind and back off of that, I suppose. But i wouldn't hold out for it. He was making similar statements during the filming of Last Crusade!
If they just went back a year or two, it would seem a little hackneyed. None of the other adventures have left him as changed as Skull: he has a family now. Undoing all of that would probably, as has been said, just confuse the casual audience. Especially the kids who are more likely to only be familiar with the new movie.
That said, it's certainly plausible that his family won't figure that prominently into the next one. The most recent Lucas pronouncements on the subject suggest to me he's distancing himself a bit from Shia. Indy probably wouldn't be carting the family around on his quests anyway.
The time frame doesn't really matter too much, whether it ends up being in the 50s or 60s. The Old World is still the Old World, to much the same degree. It's not like Indy hangs out in trendy places. I wouldn't mind seeing them pull a fast one and bump it on up to the 70s. If they do one in five years set in 1970, they will have caught the character up to Harrison's actual age!