Volvo S70 Dashboard light colors (Red VS Orange)
 

https://cimg4.ibsrv.net/gimg/volvofo...2d5dac79c1.jpg
Volvo Dashboard Lights (when key is in position II i.e. car not started)

2 cases depending on where the key is in ignition.

Key is in position II in ignition (car not started):
I am not sure what these dashboard light colors signify. I am not sure if you can see but there are 2 colors going on, on this dashboard - red & orange. My service light is always ON so may be that's why? I see battery light is RED, engine oil light is RED, coolant level light is RED.
Why are they RED and not ORANGE?

Key is moved from position II to position III in ignition (car starts)
ALL these lights disappear except bulb-failure dashboard light in Orange and Service light (which is always ON)

Is it normal for S70 to display these lights in orange and red randomly when the key is in position II OR is there something deeper going on?

Sounds normal to me. The reason the ones are red is that they signify a CRITICAL issue that needs to be looked at as soon as possible. In the case of the oil light and the temperature light, the engine should be shut off immediately to avoid major damage. The orange lights are are advisory lights telling you there is a problem that needs to be looked at but not critical. Your service light is on to tell you it is time for an oil change and should be reset with a tool you can get off of Ebay for a few dollars. The bulb failure light is telling you that you have a headlight, tail light, turn signal or brake light bulb burnt out.

what coolant fluid do you recommend? My Volvo service guy told me to use original Volvo coolant OR just water but nothing else. what do you think about that? any recommendations?

what do you mean by "In the case of the oil light and the temperature light, the engine should be shut off immediately to avoid major damage." ? Do you mean that the engine shuts OFF automatically? I am seeing that red light since I purchased the car 6+ months ago. I don't think it's that critical as I got my timing belt replaced with a new water pump, new coolant fluid etc just 4 month ago.

I should have made myself more clear. When you are driving on the highway if the oil light or the coolant light comes on it means there is a problem and the you should shut off the engine as quickly as safely possible to avoid engine damage. As for coolant, I use either Volvo coolant or Prestone.