Just now saw this one! I think your deduction of red for an experimental aircraft makes sense, and it does look cool. Late war German aircraft experiments are so "out there" it makes for fun modeling for sure! I was lucky enough to score (on eBay) a 1/48 Dragon Models version of this very same aircraft, and it waits patiently in the stash... As for the missile-with-a-man-in-it-concept, this ranks right up there with the ArE381 "Julia".
You did a beautiful job of whipping this little guy into shape. Well done, especially the paint finish.