Zelda games always had those backgrounds that exactly fitted the scene. Also, the grey world is not totally black and white, as some others may have seen... And the reason it is grey is not because animals cant see colours, but because the twilight zone just is...well...grey...If you've seen trailer 3, youll notice it is already grey when link changes into the wolf. So color-blindness isnt really the problem i think. I have a whole theory around it, but i wont bother you with this at the moment :p.
The minimal color added to link. I think it is done to make him more mature, and realistic. No? Correct me if im wrong, but I think its better to have a darker link, if you want a darker game...