I think your flight mode awareness display is good but could be improved. Use the green box for currently active as you have suggested, but also add a limiting time flashing red box for a terminating parameter+flashing green box for a commencing parameter. After the time period the red box disappears and the flashing green box stops flashing.
eg IAS mode during descent to an altitude
During altitude capture as the primary parameter changes from IAS to ALT, the IAS green box would change to flashing red and the ALT box activates as flashing green, with an audio alert. After a second or two the IAS flashing red disappears and the ALT flashing green stops flashing.