And we actually use the term "verenpunainen" to say that something is blood red.
To my understanding the first "as" in English version may, if not must, be omitted, to match the finnish version
Would it be wrong to answer this as "Tuo kukka on niin punainen kuin veri"?
'niin' sounds a bit unnatural to me, 'yhtä punainen kuin veri' would however be correct
'kukkanen' should also be accepted.
'kukkanen' is the diminutive form of 'kukka', so actually it should not be accepted