With regards to the bluing of tools during grinding.....The first thing you MUST know is what your tools are made of. If (now regarded as old fashioned) high carbon, often called tool, steel it is imperative that no bluing occurs as it is a sure sign that the heat treatment has been ruined. Regular dipping into a container of cold water is the way to go.
If your tool is marked HSS, high speed steel, it would be necassary to heat it to orange... virtually impossible on a grinder... before heat treatment damage occurs. Bluing a HSS tool does no harm at all but dipping it hot into water risks crazing the surface so should be avoided at all costs.
All the best
Brian