The red streaks on the legs (as well as the red on chickens' combs and wattles in both sexes) is driven by hormones. But there's a lot more than hormones that's necessary to make babies, so I wouldn't count on that half-truth to judge the actual virility of a rooster. He might have the brightest red streaks and still fail to hit the target, as in the above example. Or he may have a low sperm count, or defective sperm. Those are additional factors unrelated to the red streaks, which can still result in poor fertility and hatch rates.
50% is very low for a small flock and a good hen-to-rooster ratio like yours. Maybe your flock has underlying issues you don't know about. Given that, and given your hen's overall health and defects, if I were you I would not propagate members of that flock (and especially that hen). I think it's unethical to breed unhealthy or defective animals, even if they are our favorites.