Red visible through translucent parts of the body is often said to be indicative of bacterial infections. I'm not sure. Might just be inflammation brought about by various causes.
Poor appetite can indicate disease. And small size might be a result of disease, i.e.the big otos are the ones who aren't sick, and therefore feed better, and then grow larger. The ones which were sick always ate less, and therefore stayed small relative to their cohort.
One fish dying after another is odd - in a group of cichlids, this would be because of dominance/aggression issues (the last guy in the pecking order can die from stress, and then another fish takes its place, etc), but otos don't do it like this. In your case, I speculate it's a non-acute pathogen, maybe internal worms or other parasites.
If I had to guess, your fish might have some chronic, non-acute disease, probably internal parasites. Wild fish almost always have parasites, and a healthy fish's immune system can keep their numbers under control. Stress gives the parasites an opportunitiy to overwhelm the fish (in my fish, it happens when I miss too many water changes, or they become the target of aggression, etc).
If you really wanted to treat them, the usual drugs are praziquental for worms/flukes and metronidazole for protozoa (look for products with these active ingredients). It's callous to say this, but new otos are cheaper than meds.
I might also look into whether there are any stressors that could lead to the fish succumbing to disease, especially the kind of stress that affects one fish at a time. Is a tankmate nipping them? Etc.
(Caveat: this is just my wild speculation... oftentimes with fish we really have no way to do good diagnoses...)
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