Hamlet has been concerned since he saw the ghost with the issue of appearance versus reality: who tells the truth and who lies? Is the ghost actually his dead father? Who among the courtiers in a corrupt court tells the truth? Is his uncle really a murderer?
It also weighs heavily on Hamlet, who is depressed and having suicidal ideation, that he feels paralyzed. He is terribly grieved over his father's death and feels the loss acutely. If the ghost is telling the truth, he feels the burden of needing to avenge his father's murder.
When the traveling players come, Hamlet watches the First Player as he acts the part of Hecuba, the wife of King Priam, mourning her husband's death with tears and body language that communicate deep grief. Hamlet wonders that someone merely acting a part can so convincingly convey strong emotion. Hamlet asks,
What’s Hecuba to him or he to Hecuba
That he should weep for her?
He then compares himself to the player, noting how deeply he, Hamlet, has genuine cause for emotion ("passion") and a real "cue" (the words of the ghost) to prompt him to act. He wonders
What would he [the player would] do
Had he the motive and the cue for passion
That I have? He would drown the stage with tears
And cleave the general ear with horrid speech,
Make mad the guilty and appall the free . . .
Hamlet judges himself harshly for not being able to muster the player's emotion. Why, he wonders, can't he express or act on what he feels?
"Am I coward?" Hamlet wonders. Hamlet's inner struggles are acute and ongoing, a source of anguish to him that is only exacerbated by his encounter with the player.