Yes, the US Clay events (in Indianapolis many years) were on green clay. As for green clay being a southern-only surface, I'd say it started as an eastern alternative to grass. Hard courts were unheard of in the east in the early days, and thus public courts built with low costs in mind used clay.
A tradition was built up of early season green clay events in the south from the 1920's. Clay events were held in the north in July, but often had problems getting good fields because the Us Open was held on grass. Being closer in time and place to the US Open, most big northern tournaments were grass until 1974, then green clay, then hard courts. Being held farther away, southern states have held onto the clay tradition.
I can't answer the question of why green clay was used here over red, but the US Open move to clay had little to do with helping out Chris Evert. When the decision was made to switch to clay in 73 Evert was still an unknown force and Goolagong beat her on clay that year. Besides, if helping Chris was the goal they would never have abandoned clay after 3 years.
The main reasons were player complaints and the high cost of grass. The grass was so bad at Forest Hills in comparison to Wimbledon that there were a lot of complaints about torn up courts with brown patches and horrible bounces.
The second consideration was the high cost. Grass courts are simply more expensive to maintain. With more events and country clubs switching to har-tru because of costs it was only a matter of time before they changed.