"Its color is red."
Translation:Ĝia koloro estas ruĝa.
In most cases, you can substitute esti + adjective with the verb form of the adjective's root.
So, since red is ruĝa, to be red would be ruĝi.
To turn red (or to blush) is ruĝiĝi. (The -iĝ affix: to become something).
To color something red is ruĝigi. (The -ig affix: to cause to become something.)
Colours can also be nouns when they're not describing something of that colour. For example, in the sentence "Purple is a nice colour", "purple" is a noun.
In the given Esperanto sentence, it's ambiguous whether red is a noun or adjective. Thus, you can use either ruĝo or ruĝa. .
While your first, more general comment is surely correct, I'd disagree with your last claim.
From a logical point of view, in a sentence like "its color is red" the status of "red" cannot be considered ambiguous; here it must function as a noun.
Just as you said: as an adjective, "red" is used to describe things - concrete, physical, sensible things. But in the sentence at hand, the subject is "its color", and this is an abstract property of some physical thing and not itself a concrete object. To see what I mean, consider the following: It seems that in all instances where "red" is used adjectively the phrase "... is red" can be substituted more or less equivalently by "... has the color red". So, for example, instead of saying "the ball is red" you could say "the ball has the color red". But now it's obvious that the sentence "its color is red" cannot be analogous, for "its color has the color red" sounds quite nonsensical.
Actually, the logical form of the given sentence is not that of a predication (X has the property A), but that of an identity statement (X is (identical with) Y): "its color = (the color) red".
That said, most natural languages admittedly handle the matter rather imprecisely. In German (my native language), for example, it would be acceptable to translate the sentence in writing as "seine Farbe ist rot" as well as "seine Farbe ist Rot" (the uppercase variant signaling that the word is understood as a noun, the lowercase form that it functions as an adjective - thus quite comparable to the opposition of the endings "-o" vs. "-a" in Esperanto.) The reason for this probably is that the sentence is felt by many speakers as being about the colored thing (or the thing 'color-wise') instead of its color, properly. So the underlying interpretation would be something along the lines of "as regards its color, the thing is red" (where "red" really does function adjectively).