Does coloring the edges of CD's help the sonics?

no it doesn't

I ended up taking off green marker on cd's,made a little difference i thought.Not enough to get your fingers all green though.My vote is dont bother unless its the treatment pen and conditioner?cant remember what it is called.inho

I used to do it religiously, but my faith was unrewarded :-)

I can see an improvement on DVDs, but it makes upper frequencies on CD's harsher/brighter and more digital.

If it is true, how does it work?

If you believe something works then your mind will often trick you into thinking it did something positive.

If you can't measure a difference and demonstrate it repeatedly with measurements from independent labs - then forget it. 99.9% of the time it is just your mind playing tricks.