A picture is worth a thousand words...
...and a species that begins by communicating with pictures would likely never stop.
Humans developed writing to imitate the sounds we use to communicate. When we talk, we talk in sequence, placing one simple concept after another. We do this because, lacking chromatophores, we are physically incapable of producing a representation of a complex situation all at once.
These cephalopoids are not so limited. If they are capable of displaying complex images on their skin, they would likely use these to display a clear representation of whatever it was they were talking about. Why make words for "a shark is chasing me" when you can just flash a picture of a shark chasing you on your body? While they would likely develop symbols for more abstract concepts as their society developed, the boundary between a word and the thing it represents would be much less distinctive than they are (by necessity) for humans.
Because of this, they would likely never move on to anything that resembled "writing" in the way we think of it, instead moving directly from crude cave paintings to more sophisticated images. These could be vast murals depicting a story, or smaller, more symbolic pictures, but unlike human writing these images would not be "sequential", rather one could view them all at once.
This will likely affect the way the creatures think. Humans think in sequence because we communicate in sequence. Cephalopoids, being visual communicators, would probably have a more "holistic" way of thinking, their minds encompassing the entirety of a concept at once. It would be very interesting to see how their species might interact with humans or human-like sapients.
As for colors, it bears mentioning that the lack of access to colors in early society is a quirk of the world humans inhabit. Most familiar animals and land plants don't produce pigments in large quantities, apart from dark, light, and red. But the world beneath the ocean is very different; many animals are brightly colored and produce numerous variants of pigments. While this might not be the case on another planet, cephalopods on Earth mainly evolved the ability to change color in order to camouflage themselves against the species in their environment. Therefore, it is likely that any color these creatures are capable of displaying is a color that they can find in their environment, and can probably make paint out of it (though figuring out how to get the paint to stick to things underwater would be a problem of its own).
