if you just hold down the button for a little bit it switches from green to orange, but if you hold it down longer, it switches from orange to red. I once made the mistake of leaving a wii on "orange" mode overnight, and in the morning, it was really hot, but it didn't damage the wii at all.
Stanby means WiiConnect24 is on. And the light will be yellowish/orange. Your Wii cannot be harmed by the WiiConnect24. If you have a faulty heatsink, your GPU will fry eventually, whether you leave the system on Standby or not.
If the light on your Wii is Red, that means it's completely off.