It makes itself a token creature to live on? Kinda 'living sorcery'?

Seems a bit badly worded right now; but as an idea, seems pretty good. Semi-equivalent to "5/1, haste, ~ is unblockable the turn it ETBs" (not quite since it's 4/1 the first turn) which is also an interesting space to play in - and something red can certainly do; and flavourful and feels roughly the right cost to me.

I think you're onto a winner; though that wording needs work. And to be much much smaller.

"Then you may put a 1/1 [color] creature named [name] onto the battlefield and exile this card encoded on it. Whenever that creature deals combat damage to a player, its controller may cast a copy of this card without paying its mana cost." That's the best reminder text I can think of. Yours was pretty good, since you just copied from cipher. The official rules would clarify that the color and name copy the spell with legacy. The only way the reminder text is wrong is if you change the spell's name or color on the stack.