Yep, you need to keep him from licking. Do you have a cone for him? If not, your vet should be able to hook you up with one.
The redness is irritation from the licking and there's a risk of infection with it. Watch it for any swelling or discharge, and make him go cold turkey on the licking...
Also, it probably wouldn't hurt to limit his activity for another couple of days to minimize any swelling. The area is very vascular and it takes a while for the vessels to totally close off after a neuter.
And finally, I'll warn you now that we're picture hounds here, so when he's feeling a bit more his normal self, we'd love to see some pics of more than his belly.