Hey , it could be a number of issues…
In terms of colour - its possible your data does not have colour values in the file? So when you choose the colour setting it is showing white because there is no colour value for each point. I have not used Displaz, but it looks like it is in grayscale/shaded mode in the image above.
In terms of the sparseness, you may find it helpful to see some of the comments above…point cloud in 4.2.5 isnt quite working yet properly…but @ and the team are working on it!
Can you give more information on the data i.e. What format is the data? What did you export it out of? What steps you took to bring it into Unreal. Only if we have more information can we help.