Assuming you have an NSF9.8A3 4-stroke. You didn't mention that, and it's critical for diagnosis. If you are exceeding about 6200 RPM, the ECU will limit speed by staggering the ignition. That could trigger the red LED. Also, if the oil is over full, even a drop over, you may be getting foaming and extreme crankcase pressures, causing those symptoms. If the oil pressure drops, and the LED turns on, and the ECU limits speed to about 3000 RPM. Oil level of about 3/4 on the stick is fine. Your best oil for that motor is non-synthetic NMMA-certified type FC-W, in grade 10w-30.