If my motors don't have a flat spot, I grind one on. I use blue loctite on my set screws. With red loctite, you will have to always heat it up to get you set screw loose to remove your pinion. If you do have a solid set up and don't plan on changing anything then red might be ok, but I don't really recommend it as blue is strong enough.
Like Lutach stated the flat spot is a must. It is an improvement that will not hurt the motor. I also agree with the blue loctite as you never know weather or not you will be switching pinion gears or not.