@Will_Hoch The colored rectangular block on news will appear when news is coming from one of the organization news sites.
If you set a communication site as the home site for your organization, it's automatically configured as an organization news site.
Documentation: Create an organization news site
I don't think you will be able to remove it from news web part settings. So, you may need to remove a site from the list of organization news sites using PowerShell: Remove-SPOOrgNewsSite
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