IME red bugs don't directly consume the coral flesh, but the protective mucous of the coral. They also annoy the coral and prevent good PE. If there are enough of them, this can affect the coral to the point where it starts to go downhill. Your STN at the base was likely caused by an environmental factor like quick Alk changes. Also, last I read it was unknown if red bugs lay eggs or give live birth.
Good news is that they are easy to get rid of if you can get interceptor. Just leave out your crabs and shrimp for three weeks after treatment or they won't make it.