Right before it turns red is good. That means you're using all your villagers. Red means you've assigned more villagers to job slots than you actually have villagers in the village. For exmaple, say you have 10 villagers, and you assign 5 to be builders and 6 to be lumberjacks, the text will turn red, because to fill all the requested slots you'd need 11 villagers. You'll be fine really, as you'll just end up with 5 of each. Once a child grows up or a nomad joins the village they'll automatically try to fill that 11th slot. So all in all it's not a big deal if it's red, it just means you can't satisfy the request.
As for the boards, you're correct. If you set it to maintain 20 boards, and you create 20 boards, the carpenters will for the most part just stop working as they have nothing else to do. But they may do some side tasks, like taking extra logs around the village to the lumber mill to eventually be processed. But generally speaking they're just going to idle, especially if the lumber mill is full.
Some workers won't idle though, it really depends on the worker and what their job is. Medics for example will wander around the heal people if they've met all their manufacturing needs.
In the future when more complex jobs are added I may end up with some side tasks for everybody. We'll see.