i see two parts of program what
draw the same ellipse,
i guess the second wins.
so the first one using the c[i] has no effect.
( test: disable the first ellipse and you get same picture )
second: your if structure
about the mouseover is like
not draw the ellipse ( is that wanted or did you expect a other color )
there is a e[i] array not named containing 0 || 1 || 2
detected by if structure only if ( 0 ) {orange} else {green}
there you could add a third color.
i try:
int no = 20; // number of objects
int[] x = new int[no]; // x-position
int[] y = new int[no]; // y-position
int[] d = new int[no]; // diameter
int[] e = new int[no]; // color
void setup() {
size(500, 500);
ellipseMode(CENTER);
colorMode(HSB, 100, 100, 100);
for (int i = 0; i < no; i++) {
d[i] = int(random(15, 50));
x[i] = int(random(d[i], width - d[i])); // always show full circles
y[i] = int(random(d[i], height - d[i])); // always show full circles
e[i] = int(random(0, 101)); // kll 0 .. 100 HSB colors
println("x "+nf(x[i],3,1)+" y "+nf(y[i],3,1)+" d "+nf(d[i],3,1)+" HSB color "+nf(e[i],3));
}
}
void draw() {
background(20, 50, 80);
for (int i=0; i<no; i++) {
if (dist(x[i], y[i], mouseX, mouseY) <= d[i]/2) {
noFill(); // but show circle
stroke(50, 100, 100);
} else {
noStroke();
fill (e[i], 100, 100);
}
ellipse (x[i], y[i], d[i], d[i]);
}
}