Well, I'd imagine that the user shoots out two different colored beams simultaneously that fly on the same path. The vivid color and contrasts of the beams catch the foe's eye, hence the name. The beams carry Bug energy - much like the dust in Silver Wind.
As for Dewgong... Dewgongs are based off of dugongs, which are named from a Malay word for mermaid, which can also be called sirens. Sirens attract people to their location... and Signal Beam would probably attract attention as well, hence the name.