We just assume that we are talking about an en-ord. It would be "Det är rött på insidan" if we were talking about a house for example (ett hus).
No, "there is" can sometimes translate to "det är", but "it is" can never be "det finns". You can say "det finns röd färg på insidan" but that means "there is red paint on the inside".
No, because det är/finns refers to things. Here we're referring to an abstract adjective.