The shotgun fires a tight spread of bullets when the fire key is pressed. Each pellet does a decent amount of damage, but if most of the pellets connect, it can deal a high amount of damage per shot. The gun must be pumped between each shot, making its rate of fire lower than other weapons.
The shotgun's tight spread and high amount of damage if most of the pellets connect makes it very useful for any situation, even strong enemies or bosses.
Because of how handy the shotgun is, it works well in just about any combination. For example, combining it with a rapid-fire weapon like the Tommy Gun or XL4 Lasergun allows the player to hit a target with a shotgun, then continue hammering it with the rapid fire weapon while the shotgun is pumped. Combining multiple shotguns with multiple rapid-fire weapons can quickly destroy even the strongest enemies.
When paired with short-range weapons, like the chainsaw and the flamethrower, the shotgun will make quick work of enemies at close quarters. Having a stack built around this idea is always handy for certain close-quarters levels, such as Pyramid Looting.
Shotgun ammo is common enough that it can be used frequently.