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I'm not sure if I am describing this correct or not, but I want to take the text and "embed" it in to a design if that makes since. So basically there would be a cut out of that text so I can add it back in. If anyone would be kind enough to point me in the right direction. Thanks
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You can outline the text to make it an object then use the shape builder tool to remove the letters from your background leaving holes where the text was - is that what you are after?
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Yes I believe so.
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Instead of clicking through all those fiddly bits, you could also get Illy to do that for you: select all the red make compound path, select all black make compound path, select all, then Minus Front in Pathfinder.
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I tired that, ended up having to hold down ALT and click each piece individually to remove it. It works but not the quickest way to go about doing it.