prop pitch controls the angle made my the propeller blades with the propeller's shaft/knob.
this angle is the angle of attack at witch the propellers are "biting" the airflow, and is controlling the projection area of the propeller blades' sufrace: the smaller the angle, the less "biting" (the projction area tends to 0), the closer to 90 degrees the more "biting" (the projction area tends to 100% of propeller's blade area).
the more "biting" the propeller blades has, the bigger the obtained propulsion force and therefore the bigger the force (the more the power) which is spent on actually moving the propeller shaft/ blades, which means that at a constant motor power, your RPM will be lowered.
now, the propulsion force is the inverce of the force with which the iar is pushed to the back of the airplane by its rotating propellers. this force = the force generated by a propeller's blade 360 degree rotation x RPM. Thing is, this force generated by a propeller's blade 360 degree rotation and the RPM are inversely proportional (when one rises, the other lowers), so you need to find the balance (the point at which you can get the max propulsion).
to complicate the whole thing, inertia comes into play too: rise it too quickly (the bigger the difference between the current/intended propulsion force given by the propeller blades angle, RPM) the engine can't assure that much power, and it drowns.
if you also add in it the altitude, engine power variations (WEP), the airplanes' control surfaces drag variation, etc.. you will give yourself a nice headache
strictly to your point: "when you increase the prop control to max RPM (even past redline on the tach) you actually LOSE airspeed" -> when you "increase" the prop pitch you're actually lowering the propeller blades angle to the propeller's shaft, which translates in less biting, less air pushed to the back, less propulsion force, less force need to rotate the propeller's shaft, higher RPM (ie the propulsion force generated by a propeller's shaft rotation x RPM is actually lower because the force decrease is higher thant the RPM increase).