Το μπλε σου πάει καλύτερα από το κόκκινο.

Because in this sentence the color words are being used as nouns, not just as adjectives.

• το μπλε = the blue (one)
• το κόκκινο = the red (one)

Greek does this very often: an adjective can stand on its own with an article when the noun is understood from context.

So instead of saying something like:

• Το μπλε πουκάμισο σου πάει καλύτερα από το κόκκινο πουκάμισο.

Greek can shorten it to:

• Το μπλε σου πάει καλύτερα από το κόκκινο.

This is like English the blue one and the red one.

Μπλε is one of the color words in Greek that is usually indeclinable, meaning it does not change form for gender, case, or number in normal use.

So you can get:

• το μπλε
• η μπλε μπλούζα
• ο μπλε τόνος is less standard in everyday speech; often speakers prefer other structures depending on context

The important point for this sentence is that μπλε stays μπλε.

By contrast, κόκκινο comes from κόκκινος / κόκκινη / κόκκινο, which does change form.

Here κόκκινο is the neuter singular form of the adjective κόκκινος.

Since it is being used on its own with το, it means:

• το κόκκινο = the red one / the red thing

Greek often uses the neuter singular when referring generally to a color or to an understood object.

So in this sentence:

• το μπλε
• το κόκκινο

both work as short forms meaning the blue one and the red one.

Here σου means to you and functions as an indirect object clitic.

With πάει in this kind of expression, Greek says something like:

• It goes to you
• meaning: It suits you

So:

• Το μπλε σου πάει
  literally = The blue goes to you
  natural English = Blue suits you / The blue one suits you

Important: this σου is not possessive here. It does not mean your. It means to you / on you in the expression for suiting someone.

Yes, πάει literally comes from the verb πηγαίνω / πάω = to go.

But in this expression, πάει (σε κάποιον) means:

• to suit someone
• to look good on someone
• to go well with someone

So:

• Το μπλε σου πάει = Blue suits you
• literally: The blue goes to you

This is a very common Greek way of expressing what English says with suit.

Because καλύτερα here is functioning as an adverb, not an adjective.

It describes how well the color suits you:

• σου πάει καλύτερα = it suits you better

If Greek used an adjective here, it would need to agree with a noun. But that is not what is happening. The sentence is comparing the degree to which each color suits you.

So think of it like this:

• καλύτερα = better as an adverb
• not better as in a better shirt

Από here means than in a comparison.

So:

• καλύτερα από το κόκκινο = better than the red one

This is a standard Greek way to make comparisons:

• μεγαλύτερο από... = bigger than...
• καλύτερα από... = better than...

In this sentence, the comparison is between two options:

• το μπλε
• το κόκκινο

Greek often leaves out a noun when it is obvious from context.

So if you are talking about shirts, dresses, ties, jackets, nail polish, etc., you can simply say:

• το μπλε
• το κόκκινο

and the listener understands the blue one and the red one.

English does this too:

• I prefer the blue.
• The red looks better.

So the sentence does not need to name the item explicitly if everyone already knows what is being discussed.

Yes. Greek word order is fairly flexible, and moving words around usually changes emphasis, not the core meaning.

For example, you may hear:

• Το μπλε σου πάει καλύτερα από το κόκκινο.
• Σου πάει καλύτερα το μπλε από το κόκκινο.
• Το μπλε πάει καλύτερα σε σένα από το κόκκινο.

These all express basically the same idea, but the emphasis shifts a bit.

The version you were given is very natural and neutral.

No. Σου πάει is used more broadly for anything that suits someone, especially in appearance or style.

For example:

• Σου πάει αυτό το φόρεμα. = That dress suits you.
• Σου πάει το κοντό μαλλί. = Short hair suits you.
• Σου πάει το μπλε. = Blue suits you.
• Δεν σου πάει αυτό το στιλ. = That style doesn’t suit you.

So it is a very useful expression beyond just clothes.

Yes, in many contexts Greek can use either:

• καλύτερα
• πιο καλά

Both can mean better.

In this sentence, καλύτερα sounds very natural and is probably the more standard choice. So:

• Το μπλε σου πάει καλύτερα από το κόκκινο.

is exactly what you would expect to hear.

You would just switch the two color phrases:

• Το κόκκινο σου πάει καλύτερα από το μπλε.

Same structure:

• [color] + σου πάει + καλύτερα + από + [other color]

This pattern is very useful and easy to reuse with other adjectives, clothes, or styles.