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I always assumed it was due to the light pollution reflecting off the clouds from Rupture Farms.
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Seeing everything together it does seem likely they're pollution clouds. Definitely too bright, but to change the brightness would mean changing the colour scheme- and that's why I love this level in the first place!
Maybe adding some more lights in the background would add to the light pollution vibe you mentioned? Nothing too bright, maybe some searchlights scanning the ground in the distance?
Also, in those screens, you really notice how flat everything is! The cages are all in one line. With depth added in Abe HD, it would be awesome to see hundreds of scrab and paramite cages going off into the distance as far as you can see, with searchlights showing brief glimpses of creatures inside.
Add in constant screeches and noises from the animals, getting louder when they are illuminated, and it could make the stockyards section seem a lot more believable. Maybe add some other creature cameos too like elum or meep, or the mysterious massive outline/silhouette of a creature we haven't seen before right in the distance