Please tell me what this crazy stuff is
 

The red mushroom thing is growing rapidly, little heads are popping up, does anyone recognize these?

They are a type of bubble algae, I have a ton of them in one of my tanks.

looks like a red bubble algae to me. If you can remove it without popping it I would do so. I get them every once in a while and they have never become a problem for me however.

what if it pops? ...

would it be bad?

it releases spores into the tank and aids in reproduction - not good

However some people feel that if you pop them young enough then they havnt had a chance to mature yet so you may be alright. I dont know for sure tho.

I've popped a few when they first appeared and they never came back so I can't say for sure that it would be bad but I would try to keep them intact to be on the safe side.