Hmm...
My 360 was doing something similar last night. Red and blue dots all over the place. I checked all the cables, everything was secure, nothing near them to interfere... So I restarted the system, and they went away. Kind of odd. However, my system froze 3 times on seperate occasions while playing. Once during Halo 2, once while pulling my guide up in the dashboard, and once in Perfect Dark 0. Everything is vented well the system is in a large part of a cabinet, and the back has a huge portion cut away so cables can pass through, so airflow is not a problem. I Have the power brick elevated by two small items, one on each end, to hold it 4 inches up so its airflow is fine.
I think I may just be a magnet for defective products. My Xbox 1, is my 6th. The previous 5 have had various errors. Anywhere from dirty disc, just not booting, freezing, and one with a severe framerate problem. This 6th one just started freezing and booting to a red LED, but upping the voltage of both fans to 12v and running it with the top off fixed it. My first PS2 didn't play DVD movies, and my first GameCube seemed to enjoy freezing on SSBM. I've been through several NES's also, but who hasn't...