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whats that red stuff by link?

No, it's not blood. When Link's sword makes contact with an enemy, it makes a reddish flash of light. That red stuff is the light fading away.

ok u never kno, this is a Teen game, it looks like blood and i hope thats wut it is because it would be really cool if they added that, also it looks like the thing got hit anyways so if could easily be blood, and only Link blinks red when hit not the enemys. or wait............im confused

It's not blood, LightvsDark, trust me. I watched that particular scene in the trailer in slow motion. It's red light, no mistake. Twilight Princess has not been rated yet- it could be E for all we know. But Zelda can be Teen without gore. Besides, Zelda should never have blood in it- it would ruin the 'Zelda feel' of the game. And there's nothing "cool" about spilling blood. -_- #

He killed it one way or the other.

And then he did that cocky victory pose(we get it Link, you know how to sheath a sword after spinning it! Even I can do that! The sword shouldn't be on your back anyway <.<). But it is a first.

So what is that thing?

it looks like a wird blob monster and in Oot there is blood when you kill almost all bosses

it never appears in the game....