How to colour multiple paragraphs?

\textcolor is similar to \mbox, so it doesn't typeset paragraphs; use the declarative form, instead, in a group:

\newcommand{\nathaniel}[1]{{\leavevmode\color{blue}[#1]}}

you could make an environment form

\newenvironment{thisnote}{\par\color{blue}}{\par}

then

\begin{thisnote}
   stuff

   in blue
\end{thisnote}

can take paragraphs of text

This is what I use:

\newcommand{\newstuff}[1]{\color{blue}{#1}\color{black}}

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