I do not think that the light is what makes the ships move. It's more likely it's just a by-product. Analogous to this:
A car engine produces a sound if it's on regardless of whether or not the car is actually moving. But as you throttle up the engine, it'll make more sound. If you haven't already noticed, at least fighters and bombers actually do have throttle-dependant engine glows, but I must agree that the same should be applied to capital ships too.
Anyway, if you want that stationary ships don't have engine glow visible, you can always FRED it in to the mission by disabling ships that are stopped, and once they have to move, un-disable them. That definitely works if you don't care about the "D" letter disturb you. It's just more job for the FREDer. Or, you can make a script that every ship that has a velocity of zero uses empty engine glow texture or something. (NB: I don't know the script stuff but I know it can be done). That would be a better solution as that would make it work the same way in all missions, not just in those that include all the disabling-undisabling hassle.
By the way, explosions can very well happen without oxygen, that's not a problem per ce... Not all chemical compounds require oxidizer to be volatile materials. Besides, remember that there actually must be quite large amounts of oxygen stored inside the ships to maintain the life support system. They can't produce all of it on the run, they must have some emergency storages on board in case the oxygen generator system or whatever the hell they use break up, as often happens to equipment even without fights...
Now, fire needs only three things to exist: combustible material, oxidizer and sufficient heat to break the combustible material and oxidizer into single atoms that can react and form reaction products that have lower enthalpy than the original reactives. If enthalpy difference is negative, reaction is exothermic and releases energy... All these requirements can be thought to be fulfilled in FS2 explosions and that's it.
Asteroid explosions are quite ludicrous, however. They simply vaporize in a big ball of fire, when they should just break into multiple pieces with visible light only coming from heated stone/metal...
