I have a set of Latlng coordinates that I want to place on a Google Map, but instead of the usual markers, I want to create an overlay where a higher density of these latlng points will create a redder color overlay, while a lower density will give a greener overlay, everywhere in between will be a shade in between red and green. How can I achieve this?

You could try to build heat map with data stored in Google Fusion Tables.
Also, have a look at this question from GIS SE:
How could I turn my data into a heatmap / intensity map?
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