The coloring is normal and has nothing to do with the mod. Also, you don't need to have the mod tell you about "incest scenes"; use the incest patch and you'll see incest relationships. Kendra is the MC's mother and Amanda is the MC's sister. The only other family member that I can remember is Bruce, the MC's dad. There is also Nicole (Bruce's fiancée since his divorce from Kendra), so semi-family but not incest obviously.
I'm not positive, but I think the red is for a more dominant MC relationship while the green is for a more romantic one. There's also odd coloring for a choice at a party with Mia (where the MC meets Jessica). I think the yellow means you reject the opportunity (with Jessica) and the purple means you risk disappointing Mia. But those choices are colored differently than any others I remember, so I'm not sure exactly what those mean. I'm just guessing on them. IIRC, those have seemed to be the pattern, especially for the red/green choices.