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Basically, you are going to want to thoroughly spray the tree with horticultural oil, being sure to thoroughly coat all branches. Apply the oil before new growth begins and again after flowering.

For more information on scale, please review the following link:

https://www.gardeningknowhow.com/plant-problems/pests/insects/control-plant-scale.htm

I see know reason why the Red Twig Dogwood would not do well.
I have a few planted in front of a wind row of Pines on my property and they have done quite well.
I also garden in MN.
On a side note, my Burning Bush shrubs have done poorly the last 2 years. The winter has been harsh on them.
Here is a link with more information.

https://www.gardeningknowhow.com/ornamental/trees/dogwood/red-twig-dogwood-care.htm

A new planting needs daily water for the first 2 weeks, then you can cut back a bit.

Adding 2 to 3 inches of hardwood mulch can help with moisture retention.

I would increase water and in a few weeks do a test on the branches. Branches that snap are likely dead, bending they remain alive.

Here is a link with more information.

https://www.gardeningknowhow.com/ornamental/trees/dogwood/red-twig-dogwood-care.htm

If the white specks rub off they could be Scale.
https://www.gardeningknowhow.com/plant-problems/pests/insects/control-plant-scale.htm

In this case I believe you are describing lenticals.
Lenticals are small white spicks or spots on the branches. Their purpose is to exchange gas between the plant and the outside.

The will no be rubbed off from the branch.
This link has an image to compare to our branches.

http://courses.missouristate.edu/pbtrewatha/redtwig_dogwood.htm

The best way to propagate red twig dogwoods is by transplanting the suckers, or shoots, that come up around the parent plant. These young shoots already have roots so you can immediately replant and water.

Alternatively, you can propagate by hardwood cuttings (live stakes) in the fall directly in the ground. Any portion of branch that is in contact with the ground will develop new roots. Hardwood cuttings (taken from the previous year's growth) should be 8-12 inches long and have at least 4 nodes. When obtaining cuttings, cut just above a node on the parent plant. Before planting the live stake in the ground make a slanted cut just below a node, dip it in rooting hormone and plant it far enough in the ground so that at least two of the nodes are below ground.

Lastly, you can take softwood cuttings in summer (june) and root them in a small pot as you proposed. If the stem breaks with a characteristic snapping sound, it is in the softwood stage and ready to be harvested as a cutting. By fall they should have developed sufficient roots to survive the winter.

For more information on hardwood and softwood cuttings, please visit the following link:
https://www.gardeningknowhow.com/ornamental/trees/tgen/how-to-root-cuttings-from-various-shrubs-bushes-and-trees.htm

Yellowing leaves could be due to pests, disease or environmental stresses.
Check for marks on the leaves or holes in the leaves.
Leaf scorch can be caused from excess wind in hot weather. This may look like disease but it is not.
Watering is necessary during dry hot spells. Adding a good 3 to 4 inches of hardwood mulch around the shrub will help with moisture retention.

https://www.gardeningknowhow.com/ornamental/trees/dogwood/red-twig-dogwood-care.htm