All models in a unit have to shoot at the same target. Due to the relative positions of the shooting unit and the target, it might happen that some models in a firing unit can shoot the target while other models in the unit cannot (the target may be out of their forward arc or completely obscured by terrain or other models). Sometimes, some models in the shooting unit will be out of range. In these situations, you're free to continue with the shot, but only those models permitted to shoot the target (and that have it within their weapons' range) will fire.
In such circumstances, we assume that disciplined troops such as Elves simply do not fire at all and conserve their ammunition. On the other hand, it's easy to imagine that more boisterous warriors, such as Goblins, loose their arrows in an impressive looking (but hopeless and impossibly inaccurate) volley. In either case, for gaming purposes, these models do not shoot.