nosi

Well easiest would be to stain the whole fret red. althought a red/black striped neck might look strange might or might look cool

Yes, that is exactly how you wire it.

Two leads on a humbucker is fine, the only negative side is that you can't split the humbucker into single coils. When you connect the red wire to hot and the bare wire to ground the humbucker will perform perfectly. the 2 extra wire that you don't have are just if you want to split the coils so you use only half of the humbucker. Usually on standard guitars with humbuckers the 2 extra wires get soldered together. So unless you want to split the humbucker into single coils you won't need the 2 extra wires.