There is the collar you're talking about - you need a C spanner or Hook Spanner to adjust it. You'll see how it works - it squashes the spring making the suspension harder or of course softer if it's not squashed so much. The collar is on the top of the shock above the spring.

The canister is a rebound damper which controls the speed the spring bounces back at. This is done by forcing oil through small holes. I think the canister adds more oil into the shock so it takes longer to rebound or recover.

These shocks are old though and they can get weak over the 25 years since they were new.