How do you make a material that only reacts to a certain color of light source?!

Unfortunately, the physically based rendering in Unreal doesn’t have good support for this.
The challenge is that you want “transparent” other than the red channel. Unreal doesn’t have per-channel transparency.

I was thinking you might be able to do something with an Additive deferred decal, but that doesn’t work, either (decals can’t be Additive.)

I’m assuming you want something like a “UV fluorescence” or “blood finding light” type effect. To do that, I think I’d try maybe rendering the object using a custom depth/stencil map, maybe offscreen, and then composite the fluorescence into the scene.