Logo Adjustment and Digitizing

We have an existing two color logo. However, it does not translate well in terms of embroidery for clothing. Lettering and swirls close together, only have jpeg file, need a file for digitizing. Would actually like two scenarios. The first would retain current logo colors and digitize the final product for embroidery. The second would have a black background and change logo colors to a bright "American flag" red and blue color pallet. Please suggest how we would make this pop on a black shirt as it would need digitized once everything is agreed on.