If it is more cherry red it definitely means it is working. As for whether it is hard on the exhaust system the short answer is probably yes.
I was about to wrap my headers this year and I ended up reading a lot of stuff about how the extra heat will sometimes cause manifolds to crack, and other times cause them to rust away.
The manifold on the 1100Ts is supposedly quite even in thickness, so assuming it was wrapped correctly (right amount of overlap) it should be less likely to crack. A blanket should remove the uneven heating issue a bit. As for rusting, I heard this mainly in regards to dirt bikes, and I can't imagine moisture saying around the manifold on these turbos (dirt bike headers aren't usually cherry red). So you are probably good. Then again, a replacement manifold is $700 (although you could have a cracked one welded).
When it comes to the extra heat I don't see people very concerned about shutting it down and having the heat cook the oil in the turbo. People say to idle it for a minute before shutting it down, but I highly doubt a minute of coolant running through a cherry red turbo is going to do jack **** to the issue of oil being cooked after shutdown. VW turbo charged cars have a pump that runs for 5 minutes after shutdown iirc...