Left shift lets you place pieces without snapping to the frame, it disables the snap-to function.

Yes, red isn't good. There's a support system in the game. Blue is best, contact with the ground or a tree, for example, will give you blue level stability which means that piece will be fully supported. Green is good. Then you get three more levels of stability or support. Yellow, orange, and red (ruined). Red is bad, the piece will collapse if it's red.

Some higher tier materials have higher stability and let you build larger structures. I read that if you build stone up to nearly the maximum height, then build wood above that it can basically double your height limit.

From the Wiki:
A directly vertical pole of Wood or Stone can rise 16m off the ground before it cannot support anything above it. This is true for Wood wall, Wood wall half, Stone wall 1x1, Stone wall 2x1, Stone wall 4x2, Wood pole 1m, Wood pole 2m, Stone pillar.

A directly vertical Core wood Pole Logs can rise 24m off the ground before it cannot support anything above it. This is true for Log pole 4m and Log pole 2m.

A directly vertical Wood iron pole can rise up to 50m off the ground before it cannot support anything above it.

Trees, including those planted by the player, will effectively function as "the ground" for support purposes allowing for extremely high construction.

I have read that sometimes the colours don't always display properly while building but I've had very little trouble with it.

If you want some in game help just shoot me a friend request and I'll jump in with you for a bit.