true color printing with CMYK+White (not 3-in-1 diamond head RGB) There is this great hotend called a diamond hotend, which can be used to print in 3 colors and mix them into hundreds? of colors. This can for example be used with Red, Green and Blue filament to mix a RGB palette. They don't have to be these colors, but I believe RGB would give the maximum range of colors when constrained to 3.

However true RGB in physical printing would use separate colored voxels to create the appearance of a color, just like monitors display colors. As far as I know only HP Jet Fusion 3D printer uses this process, but it uses a process vastly different from normal diy 3D FDM printers.

CMYK is mixed physically like you would mix watercolors together to make new colors. It is used for printing on paper by all laserjet and inkjet printers (and in printing presses).
So that means even the 3 input diamond hotend is actually mixed like CMYK. Repetier firmware v92.9 has this built in with support up to 16 inputs for a nozzle, but Marlin firmware v1.0.x only supports 4 inputs per nozzle at this time.

Using RGB for the 3 inputs of a hotend, means the printing color palette lacks White and also it seems that CMYK would give a bigger range of colors. That brings our tally to 4 inputs. It still needs a white filament to print white, so that means 5 inputs. And while we are at it, probably a 6th input would be useful: like for printing black infill (to save using CMYK to mix into black) or for using transparent filament or elastic filament.

So why isn't there a nozzle with 5-6 inputs already? Could it be done? Are there such hotends already?

P.S These are just theoretical assumptions. I just discovered 3D printing and I am in the planning phase of building my first 3D printer, so I am a total n00b in this. Please correct any assumptions I got wrong.
You may be a bit misled here. First of all, you do not want "RGB" , as those are additive colors such as used when combining light sources.  You do want "RYB" (red-yellow-blue) or the more accurate CMY(plus K just to get a 'truer' black)  for subtractive colors.

Next, there's really no reason to attempt pixel-mixing. What should happen, ideally, is that pigments get fully mixed upon extrusion so that the desired color is actually in place. Pretty much any pixel-based setup will not "blend" into the desired visual perception.  And as you propose, you really need a White and a Black to adjust the saturation (take a look at the Wikipedia pages on Hue and Saturation color maps).
So I'm not convinced that separate extrusion heads will ever get you a decent color continuum.  I don't know if anyone has, or is planning, a multi-input, single-output head but I'd sure like one.