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Pokemon Red was a GameBoy Colour game, as it says "GameBoy Colour" on the cartridge.
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No it didn't. If it did, not everything in the game would be red.
http://en.wikipedia.org/wiki/Pokemon_Red
GBC does not make origonal GB games fully and properly coloured, as previously said it just changes the four shades of b/w from the origonal game. I'm pretty sure when the NINTENDO GAMEBOY logo that played when you first turned a gameboy on, that you could press a direction on the dpad and it would change the colour scheme if it was a GB game on a GBC/GBA.