The character effects like color, wiggle, ... are all done using C# code. I made custom text rendering classes that deconstruct and render strings.
Hello §bWorld, §r1red wiggle test
Is a string that I need to render. This string will be split into a list of strings: [Hello, World,, red wiggle text]. I use '§' as a special character that announces a color for a part of the string, or a color and an effect.
I then calculate the character/string positions depending on the effect and draw them. The wiggle effect splits a string into characters and changes each Y value of each character according to a sinus value, bound to a timer.
I end up with fully animated/colored strings at the end of this process. I then draw all the text to a render target and apply the pixel shader for the extra outlines.