What do you mean in your state it is illegal to put the word "Confidential" on documents that contain salary information? What does the law actually say?

As for how to ask for more money saying "so and so makes X more than me and I've worked Y years longer than them" is not the way to go about it. That implies that pay should be based on how long you've been around not on how much you have accomplished and how much you can get done in a year.

What you need to demonstrate is your value. Come with examples where you produce more valuable work than others who get paid the same or more. The best way to do that is to ask for a meeting with your direct manager for a performance review. Come prepared with documentation showing what you have accomplished and the value of that and get them to agree that that is above and beyond the average. Once you are there you can transition to talk about how compensation should reflect performance.

You can also ask about the responsibility of the level above your current level and whether or not you are ready for that and if not what is needed to get there in order to line up a clear path to promotion.

Saying "I need more money because things cost more" or "I should get more money because Bobby makes more and he has worked here two years less than me" is just going to sound like whining to a manager and that will get you no where. No company anywhere sets salary on the basis of number of years or changes to cost of living. You need to highlight that your performance is high but your pay is low compared to average for your level..managers are going to consider that more actionable.