It doesn't obscure the grain. You would have to put an awful lot on before that happens. Use the colour that gives you the effect that you want. I often use a red dye and button shellac on AB Walnut to give it warmth, otherwise it can look a bit dull, uninteresting and grey. Too much of a change and it starts looking like another type of wood altogether. I've even turned walnut into rosewood! alkanet is great for doing that. Best keep it simple and subtle though.
Colour on spruce can give you problems unless you are experienced at applying colour on top of a light coloured wood. Don't use anything darker than blonde shellac and see how it goes. It can give a bright golden yellow, which is rather attractive. Even blonde shellac can start to look patchy if you aren't careful. Another method for colour is to subject the wood to UV light. Spruce can take on a lovely aged look, even nicer with blonde shellac applied. Colour on top of woods like mahogany and walnut are less prone to turning out patchy, it still can happen though. Practice on scrap, always a good bit of advice.