Bear with me, this is from my phone.... ;>
"Are the existing case mounted studs to be removed?"
Most likely, because of the thickness of the add-on sump, they might not be long enough. Longer ones can usually be found at your local hardware store. Take one with you as they are 6mm(?) metric. If the existing studs are long enough to protrude past the sump flange and get the nuts on, use the existing ones.
"They mention something of screws and the only ones are 2 Allen head shorty's for mounting the strainer to the Jaycee cover, which I have an will use."
???????? Usually, the strainer just fits over the studs of the case or sump. Don't know about screws to hold the strainer screen on - That's a new one for me. REMEMBER, though, that for the extended sump to work, you need to extend the oil pump pickup length with the extender tube they supply with the kit. It's best if it is welded or brazed on, but if all you can do is use the clamp, then so be it.
"Also, not sure if I want to use the Red Loctite for its rated for major torque removal issue in the future, or go with the Blue. "
I have always used Red Hi-Strength for the stud ends in the engine case AND the stud ends in the extended sump. That is, for the threads of the part of the stud going into those flanges. I have used lockwashers under the nuts of both the case studs (holding the sump on) and lockwashers between the copper washers on the sump plate and the sump plate nuts. Those sump plate copper washers are super-important and so is the torque of those outer nuts. I never put locktite on the threads of the nuts in either location, just the stud threads in the flanges. If you're worried about something falling off, use nylok locknuts.
If you have a sump plate with a drain plug, then use a single paper gasket between the engine case and extended sump, another gasket between the extended sump and the strainer, and a third between the strainer and the sump plate. Goop them all up with Permatex Blue RTV before assembly. Alternatively, you can use the red silicon sump gaskets from Aircooled.net. I like them a lot. If you use those, delete the silicon RTV.