The hue is the color of the gem. If you hover over a group of similar color gems, you will see that they all have approximately the same hue. As was already said, the farther the gem's hue from the monster's hue the more damage you will do. That's why it is a good idea to have lots of gems of varying colors except for a bunch of the same color.
Great game, reminds me of the NES games I grew up with. The boss is fine except for his regular bombs, then are insane to dodge. I can dodge the homing bombs and his normal attacks fine, the bombs always get at least one hit per time he does it.
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