On page 35 of the player's guide.
Does this mean that when a colossal is adjacent to an opposing character, he can't make ranged attacks against THAT character, but can simply ignore him and shoot others?
Or can he make ranged attacks against adjacent characters?

The first one. The colossal cannot make a ranged combat attack against the adjacent opposing character, but he can make a ranged combat attack against other opposing characters even though there is an adjacent opposing character.