The expression "re" is very common in my country (Colombia) and it has the same meaning you implied, basically to augment the effect of something.
Its usage is more common among young people. Older people do not use it as much, or sound kind of off when they they say it.
I do not think it is an abbreviation of another word. I believe it works as an adverb.
I can attest it is pretty common in Colombia in all generations up to the gen-x, and, from previous interactions with other people, I know for a fact it is widely used in Venezuela too. It most likely is often used in Chile and Mexico as well.
The only rule I can think of regarding its usage is that it almost always precedes an adjective. I.e. He is very TALL --> He is re TALL; that said, it can also precede verbs, but that usage is less common. i.e "La re cagué" (I screwed up BIG TIME), highly informal usage, mainly among friends.
By the way, it is highly informal. Do not use it in formal conversation. In that case replace "re" with "muy", "bastante" or "demasiado".