What does the 'blue key" in fred's computer do?

Keys found in this level (and onwards) are required unlock the "locks" found in the layout, to defeat the level - as they are included in the level requirements. The keys themselves are obtained by earning a set of requirement (usually a number of bricks), and then used similar to that of your usual hacks (power moves). In simple terms, they are a bunch of compounded hindrances -- placed in the game to heighten the difficulty, defeating the levels.