Color is important for many reasons. Color allows your image to be unique. For example for a warm feeling you would use red, orange, and yellow. For a holiday color ( like christmas) you would use red, green, and white.
This image allows you to know its a christmas theme by the colors. The colors are allowing you to know it is a holiday.
Kerning is used to mess with the space between two characters. While tracking is used to insert space between two characters. Although these are different they are very important. They allow you to make your images to look more proffesional. Also they help you get that design you want.