Why do you say, "We the audience forgive Iroh for his past as a war monger who terrorized the Earth Kingdom. That doesn’t mean the victims of his siege will. Nor do they have to."? When it comes to the moral act of forgiveness, one of them is right and one of them is wrong. When it comes to morality, we can't say anything goes because that would result in chaos and moral decay.
Because choosing to forgive or not forgive someone who was a leader in a genocidal war against your people is NOT immoral regardless of what you choose. You are NOT obligated to forgive people who oppress you. If you choose to forgive them, that is your personal choice.
And frankly, I find this a disgusting way to frame it. “You have to forgive the man who starved you and caused pandemonium and countless deaths and laughed about it because he’s good now or else moral decay will set in and bring chaos?”
That’s just emotional blackmail.
No, you are never morally obligated to forgive your oppressors. Period.