Hi, so Rhymer has:

Does his ability allow him to attack enemies that he touches, in his firing arc, with missiles or torps?

Yup (so long as the ordnance a range of at least 1)

But my group says it does not meet the Targeting Restrictions as per the Rules Reference

It actually does, it is clearly stated in the rules reference p.4 that ordnance has the targeting restrictions printed on the card. And since Rhymer can modify them, he can make a r1-2 missile or torpedo r0-3. Thus you can fire them even against an enemy ship at r0 (you are touching).
Lots of info here:

I would ask your group what they think the 0 in "0-3" means, then, if they don't think he can attack what he's touching.

On 9/25/2018 at 2:45 PM, tsondaboy said:

It actually does, it is clearly stated in the rules reference p.4 that ordnance has the targeting restrictions printed on the card. And since Rhymer can modify them, he can make a r1-2 missile or torpedo r0-3. Thus you can fire them even against an enemy ship at r0 (you are touching).
Lots of info here:

Thanks! Ill show them this cheers.