It's not red. Red means mint state. Your red is the metal in the coin reacting to the environment. Water, soil, air, chemicals, elements.
It's initials, and a filled die means some foreign substance (usually referred to as grease) got into the recessed area and kept the metal from flowing into it. Commonly called grease filled dies or filled dies, interesting but no added value.
Yes, you are correct. For the most part they must grade MS-67 or 68. There is one that is really valuable but you will never find one. It is the 1982-D Small Date in Copper. I only know of one of those being found.