Acid in stomach which activates pepsin needed for protein digestion?

To some degree: Pepsin is an enzyme which digests protein in the stomach into smaller peptides. Generally, pepsin has maximal activity in an acidic (low ph) environment and looses activity as the pH rises reflecting a less acidic or more alkaloid environment. It is thought that pepsin has some activity up to a pH 0f 8. Since pH 7 is neutral, there may sill be some pepsin activity between a phs of 7 to 7.9.

Yes: Yes pepsin and other enzymes called proteases are activated by the acid in the stomach . The proteases break apart the Amino Acid links within the chain that makes a protein. The freed Amino Acids are then absorbed by the small intestines. Some small chains of Amino Acids are also broken down in the small intestine or absorbed directly.