When people use the term "colorful" in that way, it normally means the person was using foul language of some sort. It could mean curse words or not-so-nice words.

No, "colorful" here is not similar in meaning to "various' or " all kinds of". Oxford Dictionaries give this definition of "colorful": (Of language) vulgar or rude: "she made it clear, in colourful language, that she did not wish to talk to the police" "I said a few colorful words in our language, making him laugh." "My language was colourful and consisted of mostly four-letter words." "He uttered a crude four-letter curse that would rival any sailor's colorful language, then tried to roll over again." "Colorful language" used to have positive meanings, but now in English generally just means the use of rude or scatalogical words. A positive equivalent might be "vivid" or "evocative".

Colourful language is rude or offensive language