For your first question, what you need is overhead catenery, catenery being the overhead wiring that electric trains with pantographs use to collect electricity. There are many different styles of catenery, which in Trainz is usually either a scenery spline (like roads), or trackside objects (like signals).
There are a number of different types of catenery with different types of poles and sizes of overhead wire included with Trainz by default, but a good starting point would be the default 'QR' style overhead. These items are scenery splines which can be found in the same place you can find road splines. As they're scenery they can be freely positioned anywhere, so it might take a bit of effort lining them up along the track properly.
As for your second question, signals usually show a red light if there is some kind of blockage along the track, or a section of track that isn't properly connected. You can try hovering the cursor over a signal and it should show a brief note as to the signal's status - when it's red, it will usually say 'line ahead is blocked' or 'line ahead is unsignalled'. If it's the former, it could be something as simple as a set of points set incorrectly or another train blocking the track ahead, but the later usually means there is a break in the track somewhere.
Yellow signals are always advanced warning or 'distant' signals - they warn that the next signal along the track will most likely be red, and such give the driver time to slow down and stop.
There was an old signalling guide on this site which explains the signalling used in Trainz, but I'm not sure if it's still available for download (it used to be included with older versions of Trainz).
