[Von Due]

Thanks for the input guys and yeah, the colour thing: What I think is, the colour code was used on the letter signifying individual planes but the colour itself was determined by whether the plane belonged to the 1st, 2nd or 3rd squadron in a group, bearing in mind the 1st squadron of Gr. 2 was 4. Staffel, 2nd squadron of Gr. 3 was 8. Staffel and so on.
The letter C is red, signifying it belongs to the 2nd squadron in its Gruppe (1st squadron would be white, 3rd squadron would be yellow, ref. the Wiki page.).

This adds up to the plane flying in the 5th (N) squadron and that squadron being the 2nd in its Gruppe.

EDIT: Just realized that if any of this is actually true, that this is how it actually worked back then, then the Fighter Wings (JG) had a completely different system I have absolutely no idea how worked, seeing lots of pics of fighters using only a single coloured number, then _perhaps_ but not always, a symbol, decal or something tailside of the cross. Sometimes there was nothing but a coloured number and the cross, and the colour scheme included more colours than the 3 for bomber squadrons. Then, to make matters worse, sometimes they didn't use any number at all, just a single symbol nose-side of the cross.