It helps to read both, because they use both. The Judges guide provides more of an overall synopsis of how judges should judge, and the rubric provides a very detailed summary of what they are looking for.
Judges look for the design process. If you read the rubric, more than half of it is about the design process.
Color pencils probably aren’t recommended for sketches, but I imagine if used properly, they could make the sketches easier to read and understand.
Also, note that because of the short turn around time, the process usually goes as follows. The judges do a quick look at the ENs and place them in two piles. Those that are worthy of consideration and those that are clearly NOT. They then will go through the “worthy” pile and use the rubric to rank those.