Symbolism, Imagery, Allegory
We were totally hoping this dude would be some kind of shape-shifting weregoat or something, but we're not too disappointed by what he actually is.
The Shaper basically writes history. People basically come up to him and go, "Songs or it didn't happen." The Shaper decides which stories get told, and he decides how they get told. He gets to choose heroes and villains, and he gets to tell you what events actually mean. Looking for the meaning of your life? Ask the Shaper. That's a lot of power centered on one individual.
(We'd take what he says with a grain of salt, though. It's not as if he's actually telling the objective truth.)
For Grendel, the Shaper is also the anti-dragon: a symbol of the world and universe he wishes actually existed. Grendel kind of loves the Shaper, in a monstrous sort of way: he loves the stories the Shaper tells, but he also wants to kill him when the stories, with their ideas about God and the world, don't work out.
In contrast to his non-verbal mother and to the depressing, incomprehensible dragon, the Shaper is a dream come true. He doesn't just sing beautiful songs: he makes (as Bono would say) "beauty out of ugly things." And even though most of what he produces is not a reflection of reality, Grendel suspects that the Shaper literally makes the world a better place—and that makes the poet an obsession for him.