Blue is normal yes. Your mp3 files are below 48 000hz, in the manual says for a signals below 48 000 is blue light.
Now for the settings, go to "Sound" in Windows. Like you did in the picture you posted above. Then there where E17 was in the list, you should now see K5 something. Select it and go to "properties" down on the right.
New window should appear looking similar to this:
https://helpdeskgeek.com/wp-content...device-properties-advanced-default-format.png
And here, go to "Advanced". There check what supported formats are and set whatever you like from the list there (and click on OK or Apply yes). Then try to play a song and it should have yellow light not blue one if you selected something with above 48 000hz.
32 bit and 96 000hz is OK to set. Or 24 bit 96 000hz. It should have a lot higher than this, up to 384 or 768 000 hz. But i dont know if you set to max if this will not affect the computer performance.
And then whatever music you are playing on the computer, even from Youtube, it should be yellow all the time.
OK. Well, it is 3-4 times more powerful than e17. Good that it works. Set it as you like.