100% means the player will play at full capacity. Anything lower means his ability will be reduced by some amount.
The colors simply are quick indicators of what range of fatigue someone is in. I don't remember the exact ranges, but green is 90-100% and players should perform close to expectations, blue is below that - players will likely see a drop-off in production, and red means they're seriously fatigued and are not likely to perform well.
Try to keep your players in the green. Most people try to keep players at or near 100%. If someone is on pace to greatly surpass their real-life playing time, their stamina will go down. So, for a player in the blue or red, give them some games off and watch the number rise and the color eventually return to green.