The photosphere of the Sun is abundant with hydrogen, and it emits a full spectrum of color.Let's look at the definition of H2: "Hydrogen, H2, is an elemental gas with an atomic mass of 1.00794. This diatomic molecule is the lightest and most abundant element in the universe. It is also colorless[!]".
As for diffraction, telescope companies enjoy stating that their mirrors are "diffraction limited", meaning they offer ideal reflection up to the diffraction limit.