Color 1 will be for the bottom half of the hat. You can just keep it original by choosing red but you can get it a different color but please know that the yellow does not change. It will still have the yellow buttons and yellow outline. In my opinion it would look food with whatever color you choose.
PLEASE NOTE:the sizes goes by what the child wear not by age since this is crochet clothing. For example the baby is 6 months but wears 0-3 in clothing then you will need to get the size 0-3.