1 If attackers assault from cover does that mean the defensive fire roll is modified by red dice? For example if both the attacker and defender of an assault are in trees
The attackers are effectively in the open unless the attack is from razor wire (1/2 FP).
2 The game seems to imply that units do not black line of sight and can even be shot through (as far as my interpretation of the rules goes) this just seems odd to me but is it correct?
Units do not block LOS.
3 Can infantry squads use a tank in the same hex as them as cover against small arms fire?
4 Can infantry squads ride tanks? I'm pretty sure this was even standard opertaional procedure for the russian armies whose T34 have quiet a large "deck" behind the turret
No. Only trucks and half-tracks can carry Infantry.