Holley is a wide-spot in the road south of Sweet Home. Most of the "Holley" came from digs along the Calapooia River to the southeast. I've heard that there is still some material up there, but it is private timberland and access and roads have been closed to diggers for years.
I suppose it is "blue" in the same way people have described lavender and grapes as blue. The saturated pieces, like stonemon's cab, do remind me of grape jelly beans.