The way I read this is, I can do 1 damage to any enemy ship at range 1. Even outside of my firing arc. Am I wrong?

Yes, it can be used on any enemy ship at Range 1 and it's not restricted by your firing arc.

Also, from the FAQ:

Using Feedback Array does not count as an attack, and can be used against ships you are touching, while you are overlapping an asteroid, and while you have the Blinded Pilot Damage card assigned to your ship.

Of course, don't forget that you get an ion token and 1 damage as well.

Last game i played a blocked an aggressor for 2 turns with a pair of headhunters and took 4 hit points off it my friend was pretty annoyed by it