Well there's junking and no thinning. So normally I would say an engine is just not viable. But (in addition to draw, villages, and +buy) there's KC. And that changes the dynamic so much. A hand of KC-KC-Rabble-junk-junk can be all you need to get off to the races, even if you have a junky deck and some top-decked Curses. But being able to reliably line up 5 such cards is another story, for the reasons you mention.
To answer your question.. All things considered, I would probably want as few green cards in my deck as possible. So I'd rather have 1 Colony than 2 Fairgrounds, even though as you mention the 2 Fairgrounds would be more VP. I would get KCs & Jesters for virtual economy and pile control, and go Colonies instead of Fairgrounds. I would go Fairgrounds on $6-$10 only if the game were close to ending. And I would think this game would end on 3 piles -- Curses, Hamlets, and something else, maybe Hunting Party -- in large part due to KC'ing Jesters.
You definitely want Young Witch at some point because, although there is Watchtower and a good Bane, there is no way to get rid of a Curse once you actually have it. I'd probably open Young Witch / Silver, and then start lining up as much Hamlets and Hunting Parties asap, with a Jester in there once you're somewhat strong.
EDIT:
Would Rabble-Jester as a curser be a thing here, or is that a bit over optimistic? (EDIT2: or Fortune Teller-Jester, but that's probably not nearly as strong.)
One more thought:
Note that with KC-Jester, you don't actually need to buy very many strong cards -- if your opponent has them, you can gain them for free. So as long as you can reliably play enough Jesters, you don't need to, say, rush the Hunting Parties or something like that.
