The Noble Band of Screwballs has always been a favorite trope of mine, and this is a pretty damn good example of it. It's especially refreshing because normally Link just stands there and lets everyone just talk at him, giving him the personality of a lump of wet cardboard.
It's also kinda neat how they made Red the cute, happy one and Blue the hothead, in defiance of normal color symbolism (like here: http://www.vgcats.com/comics/?strip_id=105 ).