I know this might be a silly question but I am focusing my skill points down the red route on my skill tree, is the armour I pick up with red backgrounds correspond with the route I am taking?

No.

This game is SO difficult for me to get my head round xD

what a red background? that means the armour is a rare item, purple is legendary, yellow excellent and blue is superior.

Legendary
Rare
Excellent
Superior
(white)

going up the armour/weapon will have better stat bonus, legendary has more item effects such as increased dexterity etc and superior will have less bonus'