How common is it for senior members to be demoted - either when a new boss takes control, or while still under an existing regime? For example, if a senior member (consigliere for example) becomes slightly less reliable with advice, develops a slight drink/drug/gambling habit, or just generally falls out of favour. I don't mean if they rat or if there are serious questions about their loyalty or anything, i just mean a low level feeling they no longer really seem worthy or capable of their senior position. What would you imagine would happen in that situation? Would they just whack him out? Would they forcefully retire him? Or would they demote him to capo or even soldier?

Also, on a slightly related note, has it ever been heard than an underboss 'heir-apparent' just doesn't want the top job? Spends years as underboss only to wilfully let a capo move up above him when the time comes? I guess its more likely to happen when the underboss is a close family member of the boss, promoted to a senior position by their pushy parent, but isn't really built for the task.

It´s pretty common for the underboss to get demoted for various reasons. Right now for example, we´ve got the Frank Cali situation moving into the underboss spot within the Gambino Family, replacing Squitieri. Squitieri is out.
Every time a new boss is picked, the new boss (not always but very often) chooses a new no 2 guy.
When Amuso was made boss of the Luccheses, Casso became underboss. When Persico became boss of the Colombos, he picked Langella as his no 2 guy. Both Persico and Langella were sentenced to long prison terms in the 1980s but Langella was demoted and replaced, while Persico (being the boss) stayed on as boss. And the successor to Langella didn´t last long, Cutolo was demoted after two years to a rank of a capo.
When Massino was made boss, he promoted his brother in law Vitale to be his underboss. And throughout Cosa Nostra history, underbosses were demoted all the time. Albert Anastasia for example, seems to have had three different underbosses during his short reign as a boss.
In many ways, the underboss spot may be the most unstable position in the Family because the underboss is very much dependent on the boss.

It´s different being a consigliere. A consigliere can not be replaced that easily. Because of his special role within a Family, he is elected to the position by the captains and can only be replaced/demoted if the captains demands it. At least this is how it once used to be.
Joe N. Gallo, the Gambino consigliere, served in his position for 23 years and three different bosses. (Gambino, Castellano and Gotti.)
Vincent Rao, served as consigliere while Lucchese was boss, as well as when Corallo was boss. And Alphonse Persico functioned as consigliere for the Colombos during Tommy Dibella´s reign and later, during his brother Carmine´s reign.
And there are other examples as well in cities like Detroit and Cleveland etc.

I think Vito Genovese was also demoted to capo when he came back from Italy...

Perhaps a short period of time yes. But when Costello was made boss, Genovese was made underboss.

nicky marangello/ mike sabella were both demoted to soldiers after galante was whacked even though one was underboss and the other was a capo

And after that when Vito became boss Costello was demoted or in other words "put on the shelf"

Chuckle merlino was demoted from underboss to capo or soldier by scarf.hell gotti even put angelo Ruggiero on the shelf