## Might be up-castable to third level (if the spell can be upcast)  
**Dragons as Innate Spellcasters** (MM)   
> A young or older dragon can innately cast a number of Spells equal to
> its Charisma modifier. Each spell can be cast once per day, requiring
> no material Components, and the spell’s level can be no higher than
> one-third the dragon’s Challenge rating (rounded down).

Charisma Modifier for a Young Red Dragon is +4.   
Challenge Rating is 10   (young red dragon, MM)   
  
### This is a variant rule, so make a ruling (or recommend one to your DM)  
At first blush, casting the spell at its lowest level isn't a restriction.  Since both of those spells can be up cast per their spell text, and the dragon has the capacity to cast spell up to third level, then the dragon can cast them at up to third level. (Up cast them).  This would be more or less treating the dragon as a caster like a warlock.  

### But wait! Innate spell casting *has a restriction*
Innate Spellcasting  
> A monster with the innate ability to cast Spells has the Innate Spellcasting Special trait. *Unless noted otherwise*, an innate spell of 1st level or higher is always cast at its lowest possible level and can’t be cast at a higher level.

This text suggests that the invisibility spell would need to be cast at 2d level and could not be up cast.

Is there a loophole?  Maybe.  You can argue that there's a 'noted otherwise' in the dragon's variant ability.  

>  the spell’s level can be no higher than one-third the dragon’s Challenge rating (rounded down)  

  This can be argued as a case of specific over general, which opens an exception to the general rule as it only limits the dragon at the upper end.  You can also make the case (as Szega does) that this *isn't specific enough* to override the general innate spell casting rule. 

Variant Dragons aren't described as having spell slots

> A monster can Cast a Spell from its list at a higher level if it has
> the spell slot to do so. For example, a Drow Mage with the 3rd-level
> Lightning Bolt spell can cast it as a 5th-level spell by using one of
> its 5th-level Spell Slots.

That leaves open to a ruling whether spell slots are even a thing for a dragon.  If they are not, then they are only limited by their CR for what level a spell is cast at.   

> When a spellcaster casts a spell using a slot that is of a higher
> level than the spell, the spell assumes the higher level for that
> casting. For instance, if Umara casts Magic Missile using one of her
> 2nd-level slots, that Magic Missile is 2nd level. **Effectively, the
> spell expands to fill the slot it is put into.**

We once again see how wide open this variant rule is.  Most of the other innate casters (like the Archmage) have spell slots listed and depicted.  The dragon doesn't.  So this boils down to how the DM wants to treat the dragon's not having assigned spell slots: as a restriction or not?  If as a restriction, go for the simple ruling.  If not, go for the more nuanced ruling.     

### Simple ruling: can't be up cast.  

Due to innate casting's general limitations, the simplest way to approach this is "cast at lowest level."    
  
### More nuanced ruling: yes it can be  upcast
The specified restriction on spell level is based on the CR.  The appeal to specific general is that the text *specific to the dragon* only limits spells maximum level. That's not strong argument, but it's a way to apply specific over general.  And this is a dragon.    

**As this is a variant rule, its application will need to be adjudicated by the DM.**

What ruling is more fun at your table?  Discuss with your DM.  It's a dragon - they named the game after these creatures.