You've not changed the background color yet, it's still white. That red color is because you are in Quick Mask mode, which represents the area of what will become a selection upon exiting Quick Mask mode (shortcut is the Q key).
From where you are, this is what I would do:
1. Add the area of the background of the inside of her elbow and under the boy's ear.
2. Select as your foreground color the color you want your new background to be.
3. Add a new blank Layer
4. Hit the Q key to exit Quick Mask mode, turning your mask into a selection.
5. Make sure your new layer is selected and hit the mask icon. This will convert your selection into a Mask.
6. Click the layer Icon portion of your new layer (in the layers pallet) so that your next move happens on the layer and not the layer mask.
7. Hit CMD+RETURN to fill the layer with your foreground color masked by your selection.
8. Depending on how your Quick Mask is set up, your mask might actually be backwards, filling the people with the new color instead of the background. In such case click back on the mask icon and hit CMD+I to invert your mask.
With your new background color on it's own layer with it's own mask, you can now tweak the mask to your heart's content to perfect your edges.
Good luck!
