The red light is exactly what you think it is.

When full available power is being sent to the motors, the light turns red.

You'll notice on the other Eflite helis as you move up, when you switch into idle up, that light almost always immediately turns to red (Depending on your TCM ADJ setting, but thats another story).

If you see the red light and the heli is not gaining altitude normally, it's time ti cut it off and let the battery cool before you recharge again!

The tail twitching is almost certainly the Gyro gain, interference is not really possible (though not IMpossible, either) on the redundant radio system in the CX2.