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Transmission shifting too early

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I bought a used 2001 Corolla with 84K miles. The transmission shifts too early at 15 mph and 30 mph. I don't have an overdrive button so I believe it's a 3 speed.

Shifts are not rough and there's no clunking or slipping. The fluid looks cherry red.

I have an exhaust leak before the cat and so I have an O2 sensor code, but no other OBD codes.

Would an O2 error cause that or if not, what should I look at? I'm concerned that running the car at highway speeds is red lining the engine. I can't tell how badly since I don't have a tachometer but it sounds like it's racing even at 50 mph

Edited by Blainsbrains
Adding info

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