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Is there a good distance to drop the colour?
Yes.
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Does the creature have to be "looking" my way?
Do I need to use a specific colour?
Do some colours work better than others?
All negative: it doesn't matter where the creature is lookin and which color you use.
When the firefly moves you may place a drop of colour on its way. It solves two problems: you don't have to drop color while near the creature (=it won't fly away) but the drop IS going to be close enough to the creature to be noticed. It works well in the "Fireflies" level when the creatures fly the stairs. When they do this, you can predict exactly where they are going to be soon (one can only get off the stair at the top or at the bottom end).