Step 1: Understand the tangency condition
Lines through (3, 2) parallel to the coordinate axes are the vertical line x = 3 and the horizontal line y = 2. If a circle of radius 1 is tangent to each of these lines, then the center (h, k) must satisfy
\[
\text{dist}((h,k),\ x=3)=|h-3|=1,\qquad \text{dist}((h,k),\ y=2)=|k-2|=1.
\]
Hence
\[
h\in\{2,4\},\qquad k\in\{1,3\}.
\]
So the possible centers are
\[
(2,1),\ (2,3),\ (4,1),\ (4,3).
\]
Step 2: Choose the circle closer to the origin
Compute squared distances to the origin to compare quickly:
\[
(2,1):\ 2^2+1^2=5,\quad
(2,3):\ 2^2+3^2=13,\quad
(4,1):\ 4^2+1^2=17,\quad
(4,3):\ 4^2+3^2=25.
\]
The smallest is 5, achieved at center (2, 1). Thus, the required circle C has center (2, 1) and radius r = 1.
Step 3: Shortest distance from the point (5, 5) to the circle
For a point P and a circle with center O and radius r, the shortest distance from P to the circle is
\[
\max\{\,0,\ \overline{OP}-r\,\}=\overline{OP}-r\quad\text{if } \overline{OP}\ge r.
\]
Here, \(O=(2,1)\), \(P=(5,5)\), so
\[
\overline{OP}=\sqrt{(5-2)^2+(5-1)^2}=\sqrt{3^2+4^2}=\sqrt{25}=5.
\]
Therefore,
\[
\text{shortest distance}=5-1=4.
\]
Final answer
4