Yes sharp gravel bad as fish can cut there mouths or body on it.
I would change it to gravel that is round with no sharp edges, or sand.
Does it look like a wound on the cory or just like a bloody red patch.
Get you some info on septicemia.
I know it can be caused by dirty water, bad water quality, a fish with open wounds the bacteria in the water can enter the fish.
Taken from the link.
<a href="http
/www.goldfishinfo.com/ailment1.htm" target="_blank">http
/www.goldfishinfo.com/ailment1.htm</a>
Septicemia- A condition where bacteria gains entry into the fish's body through wounds or the stomach. The bacteria can cause failure of the internal organs, damage to body tissue, blood vessels, and result in recognizable symptoms. This often results in internal bleeding, due to the fluids filling the fish's abdomen. Dropsy may occur as a result. The problem with this type of situation is that the bacteria is present inside the fish and safe from the antibiotics you would place in the water. It could be the result of another infection or caused from dirty water. Symptoms: Clamped fins, bulging eyes, red bellies, eroding, reddened fins, lack of appetite, and fish showing signs of being sluggish or exhibiting sluggish behavior. Treatment: It is best to feed the fish antibiotics rather than using the kinds you place directly into the water. Placing the ill fish in a hospital tank is advised while administering treatment. Check your local petstore for some good medicated food or check for antibiotics if necessary. Septicemia is fatal if not treated immediately! top
So medicated food is the really the route to take, thats if the fish is still eating.