Peter, not a dumb question at all. Color is tied to the alert status, Blue=no alert, Yellow=warning, and Red=Danger or Critical. Several variables factor into determining the alert status - horizontal and vertical distance, phase of flight (on ground, landing, take-off, cruise, etc), and your traffic alert threshold preference (under the Setup / Alerts and Warnings menu).
Generally speaking, if you are using Moderate Alert settings, in normal Cruise, traffic will be flagged as Warning (yellow) within 10nm +/- 3000ft. Red would be within 2nm.