Dan;
The E6 color developer will not reduce all silver halide, but will produce a fair degree of fog. The pH is way up there, it has silver halide solvents and fogging agents, and it is very active as a result. I've tried it and it gives unusable results.
The orange color in negatives is a built in mask which forms a positive image to mask out negative image dye impurities. This is why a color negative is more accurate in color than a transparency. There are extensive discussions here and on Photo Net about this. On PN, I posted a series of curves showing the masking process.
Many textbooks cover this subject as well, but unless you are really into matrix algebra I don't suggest you go too far into it.
PE