they're just fainter than most stars (because they're smaller and cooler). They are hot enough to glow red hot. Red dwarfs are brighter, but still much fainter than other types of stars. But they are extremely common, most stars in the galaxy are red dwarfs, but they're so faint that when you go out at night and look around you can't find one with the naked eye. All naked eye stars are much brighter, but much further away.

I haven't been keeping up too much with dark matter research, but it really refers to something that alters the gravitational dynamics of galaxies. Galaxies rotate as if they were much more massive than we think they are and the matter distributed differently than we think, so this missing matter is called "dark matter". It may be some form of matter we're not familiar with that gives off no light or radio waves, but there are other possible explanations.

1) MACHOS - MAssive Compact Halo ObjectS - ordinary matter in the form of lumps of rock or even planet-sized objects drifting in the outer regions of galaxies. Unlike gas and dust, they neither emit light nor obscure radiation coming from behind them. They are so far apart the space they are in is transparent, and they are so cold they don't glow at any frequency. But there are so many scattered over huge volumes of space that they contribute to the gravitational anomalies we've been seeing.

2) WIMPS - Weakly Interacting Massive ParticleS - some new, unknown form of heavy subatomic particle, present in large amounts, but which does not easily interact with ordinary matter (like a big fat neutrino), so it is very hard to detect directly.

3) Maybe gravity departs from the inverse square law over large distances.

See LJKs post below for some recent research results.