Meaning of the flag and coat of arms of Spain

That explanation that you have given about the meaning of colors is false, you have invented it, because that is not the reason. Royal Decree granted in Aranjuez on May 28, 1785 by which Carlos III awarded the winning design for warships:

«In order to avoid the inconveniences and damages that the experience has caused, the National Flag used by My Naval Navy and other Spanish Ships can cause, making mistakes over long distances or with calm winds with that of other Nations, I have resolved that from now on they use my Flag warships divided into three lists, of which the high and the low are red and the width each one quarter of the total, and the middle one, yellow, placing in this the Shield of my Royals Arms, reduced to the two quarters of Castilla y León, with the Royal Crown on top; and the Pennant in the same three lists and the Shield throughout, on Yellow Square at the top. And that the other Vessels use, without Shield, the same colors, the list must be in the middle yellow and the width of one third of the flag, and each of the parts divided into two equal parts alternately red and yellow, all with according to the attached design.

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