Sorry for the late reply, but it is a power up. Makes you invincible to projectiles for sometime and generally makes you stronger. You activate it with Q if you are playing on an emulator with keyboard. AFAIK there are no difficulties. As for the colors, I don't think they matter.

As MrPleb said, you have to request the PC version of the game yourself, as it is different from the portable version. However, if you want to speedrun the portable version, all the resources are there. Just go to the resources tab of this speedrun page. The link to the ISO is there, and you can use an emulator such as PPSSPP which works great.