What happened to the mud that was smeared on the lighter skinned Fae? Wouldn't it have fallen off by the time of the rescue or during?

As for being disrespectful? There isn't really an answer, IMO, 'cos human colours are used and I'm not sure exactly how the Fae differ that completely from humans, except that magic dictates skin colour. With the Fae retaining classicism issues, etc., they strike me as a more idealistic version of humans -- with magic.