Lets say i am playing against Starro on the Great Arena map. Starro is in the middle of the map, my characters are on the elevated terrain, away from the edge of the elevated terrain, does starro have line of sight to my characters, or do they need to be on the edge?

I believe as a colossal or whatever he is considered does have line of site

No. He has no line of sight...he has line of fire.

Rulebook justification...there actually isn't any.

When they went with all of this new stuff with abilities, they put this into the giants, but not the collosals.

Technically speaking, the above only applies to giants, so one could argue that he has no LoF.

Interesting, I have skimmed the starro rules and it doesnt make mention of it either. Im not sure if they meant to include colossals in that ruling with the giants. Though I would say if a giant can see them, a colossal should be able to. Thanks for the info.

I'm absolutely certain that the rule was supposed to apply to both types. Collosals have worked by the same rules as those I quoted for the giants as long as I have been playing. AFAIK, that's the way it has been since collosals were introduced (as big figures) in Infinity Challenge.

Sadly, this latest rulebook was not very well done (imo). I like what they tried to do. Unfortunately, in doing what they tried, they were very sloppy. This has lead to lots of oversights like this one. (The ability to carry double-based figures is another I would suspect of happening unintentionally.)