You may be right on the first point, but Kashmiri chile powder is generally considered the "milder"option for Indian cooks, and is prized for its colour as well.
There is, of course, another factor to be considered: what's "hot"for us is not "hot" for Indian consumers. I cooked an Indian meal for the Embassy last year and was very careful to make it mild, because of the local guests, but I put out a plate of raw, green "cayenne"type chiles for the Indian guests. Most of them put 4 or 5 on their plates and were quite happy to munch on them as if they were sticks of celery