Flat tow a 4WD Colorado PU

Yes. Once you remove the key you remove all power.

Chevy Dealer, ... my first question would be "does this negate pulling the negative on the battery?"
I realize that the first gain is not having to worry about steering lock.

Let me start by saying, I am a Chevy Dealer. My shop has installed many hook ups. I only install blue ox. No special reason I just like that brand. When we do a Colorado we remove the column lock. Once you do this the key can be removed. Done.

We need to know what year you want to tow. It's silly for people to recommend how to tow without knowing what year or driveline. From about 2013 on, MOST Chevrolets need the battery disconnected to protect the ELECTRIC steering.

First, you don't say what year you are looking at. It is possible that the procedures for flat towing are different for different years.

We currently flat tow a 2017 GMC 4X4 Canyon Denali. Have towed it probably close to 4,000 miles. Works great.

If you have any questions, send me a PM.

I towed 2005 and 2007 4WD Colorado for years. No problem following the procedure in the manuals. No need to pull fuses or unlock the steering wheel.
They also did not register mileage while towing. No speed or distance limits.
Not sure what you are looking at, after 2012 the towing procedure is a little different.

Read the manual. We used to have a 06 Colorado and did not have to disconnect the battery.

I have not done it myself, but the Motorhome Magazine Dinghy Towing Guide for 2018 gives the procedure/requirements. I did not see the Colorado even listed in the 2017 guide.

From the 2018 guide:

Only flat tow 4WD vehicles with a two-speed transfer case that have a Neutral position and a 4WD Low setting. Negative battery cable must be disconnected. Keep ignition in ACC to prevent steering column from locking. See Owners Manual.

https://my.chevrolet.com/learn/2018/Colorado

Only dinghy tow four-wheel-drive
vehicles that have an N (Neutral)
and a Four-Wheel Drive Low (4 ( n )
setting.
{ Warning
Shifting a four-wheel-drive
vehicle's transfer case into
N (Neutral) can cause the vehicle
to roll even if the transmission is
in P (Park). You or others could
be injured. Set the parking brake
before shifting the transfer case
to N (Neutral).
To dinghy tow:
1. Position the vehicle being
towed behind the tow vehicle,
facing forward and on a level
surface.
2. Securely attach the vehicle
being towed to the tow vehicle.
3. Apply the parking brake and
start the engine.
4. Shift the transfer case to
N (Neutral). See “Shifting into
N (Neutral)” under Four-Wheel
Drive 0 231. Check that the
vehicle is in N (Neutral) by
shifting the transmission to
R (Reverse) and then to D
(Drive). There should be no
movement of the vehicle while
shifting.
5. Turn the engine off.
Caution
Failure to disconnect the negative
battery cable or to have it contact
the terminals can cause damage
to the vehicle.
6. Disconnect the negative
battery cable at the battery and
secure the nut and bolt. Cover
the negative battery post with a
non-conductive material to
prevent any contact with the
negative battery terminal.
7. Shift the transmission to
P (Park).
Caution
If the steering column is locked,
vehicle damage may occur.
8. Move the steering wheel to
make sure the steering column
is unlocked.
9. With a foot on the brake pedal,
release the parking brake.
Keep the ignition key in the
towed vehicle in ACC/
ACCESSORY to prevent the
steering column from locking.

It can be done and the procedure is in the owners manual. I can't be more helpful than that as when I did all the research I bought a Jeep Wrangler instead of the Colorado so never got to tow one. You can view the owners manuals online.

Does the 4WD Colorado manual say it is four down towable? That’s where I’d start. Then look at etrailer’s article on the twin Canyon. Should I summarize it for you?