Blueberries have a high iron requirement, but adding solid iron particles or rust is not the way to administer it. Use a fertilizer containing iron chelates for good results. Iron doesn't make the blueberries sweeter, but is an essential element for this plant.

Without images of the red bumps or 'worms', it will be quite difficult to help you. I can guess that the bumps might be a very common leaf gall of maples, but that would be a guess without a better description or a picture. Galls are relatively harmless, and there is no recommendation of any action that should be taken. Just ignore the galls.

The 'worms' could be caterpillars or beetle larvae. Only a picture would allow us to ID them, unless you can do a good job at describing them.

I read somewhere that blueberries like pine straw as mulch. Correct me if I am wrong.