Notice that there are many pinwheels scattered around Faraway, each color represents a character.
Sunny uses white because of, well, White Space.
Kel uses orange because that's his favorite color/thing, like his orange shirt, basketball, Orange Joe, etc.
Hero associated with blue as it's complements orange, Kel's color.
Aubrey's favorite color is pink and she chose to due her hair pink. And in a memory, she mentions that she and Mari were going to have their hair dyed, Mari chose purple.
Basil gets green because he likes plants. ¯\(ツ)/¯
A character's pinwheel is usually in front of their houses (even Aubrey's), except of Basil's. This may be because of after the incident, he hit himself off from his friends, and no longer has a pinwheel. Mari's pinwheel is also not in front of Sunny's house, because she's long gone.
At the crossroads there is a single pink pinwheel, possibly representing how Aubrey, with the hooligans, rules the town; or how she separated herself from her old friends but is still open to making new ones. The location where Aubrey met her friends when she was crying on the pavement. As it's still there after she detached from Sunny's group. It shows how much she still cherishes the memories of her friends, especially from a girl of a ruined family.
In Sunny's backyard by the stump, a blue pinwheel and purple one standing next to each other, you know why ;)
The only one instance of all pinwheels seen together is at the lake hangout spot. White is at the middle among the pink, blue and orange ones may relate to how Sunny is the one bringing together the group. Note how the purple and green ones are spaced away from the main party, possibly because the previously mentioned reasons.
In the dream world, the gigantic pinwheels of Vast Forest have all colors excluding green like how everyone except Basil there are happy together. Though green could be represented by the entire forest instead, which may refer to Basil being closest to Sunny.
