And I thought that this thread wouldn't get off-topic...
Magus' magic power is stronger than Schala's. One of the three gurus says that. Period.
About the blue hair, if people live in a magic city built on a flying island, I don't see why they would hesitate to use magic to dye their hair. Let's say, Schala uses magic to die her hair (and perhaps Janus' hair, too). Janus starts using magic (if he hasn't been using it already), becomes Magus, maintains the color of the hair periodically, using magic. Schala merges with the Time Devourer... She has more pressing problems than her hair color, so she stops dying it and it eventually becomes what it was, blonde. Kid hasn't been using magic to dye her hair, so she's blonde.
Another theory is that the color change using magic is permanent. After merging with the Time Devourer, Schala's hair becomes blonde because the magic that maintained the blue color is absorbed. Don't ask why. It's foolish to try to explain logically things like magic, since every writer understands it differently. If this happens, then Kid is blonde because Schala is blonde now, too.
After defeating Lavos, Magus goes back to 12000BC to find Schala. Perhaps he finds out what has happened... Then, Magus possibly created Serge or Wazuki (or intervened between them somehow - unlikely, though). The blue hair is connected with the second theory, that the color change is permanent. Serge/Wazuki has blue hair because Magus had blue hair when he created him (since he is a copy of Magus).
Schala is touched by that boy's fate. Why? He's a stranger and there are people with much worse lives than Serge's. Hmmm... Schala creates Kid to save Serge, so that he saves her. Hmmm... Serge saves Kid and Schala, what Magus wanted. Hmmm...
Lucca mentions in her letter that Janus might be there, near Kid while she is reading the letter. Hmmmmmmm?
About Riddel... I think it's a Japanese tradition that princesses dye their hair blue. This explains why her hair is blue. She's not really a princess, but she's the daughter of General Viper, not a common mortal...