The colors (entire rainbow) around the cutoff line is created by light phononmen called diffraction. It should be explained here in a reletively non tech manner:
under "Why do projector units create such a colorful cutoff band?"
The sky is blue because the blue light from the sun bounces when it hits oxygen layer that surround the earth. This happends on atom level. Since sunlight hits the oxygen layer all over the globe, the entire sky will look blue.
I am not an astronomer nor scientist, but to me it seems like blue sky and blue light created by diffraction root from 2 differnt causes.