It is true that this congestion can affect the baby's ability to suck and swallow. Since a baby cannot blow his nose, try to make their breathing more comfortable. Elevate the head of the crib to a 30 to 40 degree angle. Mix a fourth of a teaspoon of salt in eight ounces of warm water to make salt water (saline) nose drops. Put a couple of drops in each nostril, which helps to loosen and draw out the dry mucus, and use a rubber bulb syringe (aspirator) to suck out the mucus.
I recommend doing this 20 to 30 minutes before each feeding to help open the nasal passages and make the feeding go more smoothly. You can do this as often as you like, but as you have mentioned, sometimes the inside of the nasal passages can become irritated and a little bright red blood can be seen. This tends to heal very quickly and is not normally a problem. Remember that when you use a bulb syringe, you don't need to put it in too far and it really should be directed back toward the ear, not "up the nose" toward the eyes.
With young infants, we also tend not to use decongestants and other cold/cough medicines, as they can have side effects. Young babies are not always easily able to tell us if they are experiencing specific side effects or things are just not going well.