The issue on light duty truck is that you run out of cargo capacity long before you reach the tow rating. Keystone says the trailer is 5275 dry with 576 (11%) on the tongue. With just propane and gear (no water) you'll probably scale around 6200 lbs (I'll bet that 29'11" trailer has LOTS of storage...)
That would put your tongue weight at close to 800 lbs, add another 100 for the WD hitch and that's 900 lbs before passengers and gear in the truck. Payload capacity for a V6 Colorado is 1574, so that leaves about 600 lbs for passengers and gear in the truck. You'll be running right at the max most likely.
Going slow up hills isn't the end of the world, but it really heats up the transmission. Get a good trans temp gauge and don't let the trans get above 240* or so. The "trans hot" message usually comes on around 275*.
My personal opinion is that the truck will tow it, but you won't enjoy the experience. That's a lot of trailer for that small truck, and not something I would do.
The question you have to ask yourself is: What if I buy the trailer and it's too much for the truck? Would I get a bigger truck? You've already decided to upgrade the trailer, so going back to a smaller one is probably not something you'd want to do. Option B is stay close to home an minimize the amount of towing you do.