95 Seville STS 161,830 miles,,,,,I took your guys advice and added a bottle of lucas in transmission and drove the car for several weeks. Today I finally got around to changing transmission filters and fluid. Dropping the pan and removing the drain plug inside it took about 7 quarts total including another 24 oz. bottle of lucas transmission fix. There was a small amount of metal shavings on the magnet inside pan and the 1 filter had something that looked like insulation and some orange rubber like stuff on it. I know the metal shavings is normal wear but have no idea what the other stuff was. Here are a couple pictures, any comments are appreciated.

 

I hope the pictures are big enough after I resized them.

 

What you are seeing is absolutely normal. The fuzzy stuff is clutch material. as the clutches wear, they shed a small amount of friction material, similar to brake pad wear, only not near as severe. Brake dust winds up on your wheels, while the clutch friction has nowhere to go other than the filter. Also, sometimes during a routine service, the pan(or other parts) may get wiped with a rag. That always leaves a few stray threads of fabric material that will eventually get sucked up into the filter(s). There's nothing in either of those filters to cause a concern, imho.
As far as what you describe as the orange rubber-like stuff, that could be some leftover silicon from another service at some point.
The only orange colored material I can think of in the trans is the front seal, and/or the axle seals, depending on the origin of the seals. The front seal rubber on original trans are usually an orange compound, but the axle seal rubber is usually black.
Again, nothing there that would cause any alarm. I've seen filters with waaaay more crap on them that what you have, and the transmissions still had many happy miles left.