Hi Vaishnavi,
The answers are yes and yes: Each color is a new track; FixErrors exists to help you correct those mistakes. However, sometimes the color/identity changes you see _while_ tracking will automatically be corrected during the hindsight step. If you _review_ the tracking in Ctrax (just play or scroll through the movie), you may find there are fewer errors than you saw in real time.
You can also try tweaking the tracking settings to minimize the number of times tracks are lost in the first place. That's worthwhile because it's time you'll save by having fewer errors to correct in FixErrors.
JB