Nightclub in Sheffield is colourful (5)
I believe the answer is:
disco
'nightclub' is the definition.
(a disco is a club for dancing)
'in sheffield is colourful' is the wordplay.
'in' indicates the answer is hidden within the clue.
'DISCO' is hidden in the letters of 'sheffield is colourful'.
(Other definitions for disco that I've seen before include "Public dance hall with recorded music" , "Dancing to records" , "Youngsters' dance venue" , "lively entertainment, for some?" , "Dance hall - music by Donna Summer and the Bee Gees, say" .)