following lines, which usepersonification, nature seems fearful ("shiver," "quiver"), lending itself to a sense of mystery—because for what reason would nature be frightened? 

Willows whiten, aspens shiver.

The sunbeam showers break and quiver... (10-11)

The reader has no idea who the Lady of Shalott is, where she has come from or how she has come to this place so near to Camelot: it is a mystery.

Another detail that offers a sense of mystery or apprehension is found in this next segment:

Beneath the moon, the reaper weary

Listening whispers, "'Tis the fairy,

       Lady of Shalott." (33-36)

For many, many years, audiences believed in the supernatural. During Shakespeare's time, his plays were great favorites in that they often included witches, ghost, fairies, etc. Sometimes they could be playful (as in Shakespeare's A Midsummer Night's Dream), but other times there was grave concern by the characters of the play (and the audience) that a Ghost might be evil (Hamlet)—as were witches (Macbeth)—charged by the devil to win unsuspecting and/or weak folks to their eternal damnation. (This was also a common theme in American literature, as seen in Hawthorne's Young Goodman Brown.) While Tennyson is writing during the Victorian era, we can assume that the influences of literature on society would not have completely eliminated the idea of "other-worldly" things. The introduction of a supernatural element would have heightened the reader's sense of mystery. Here, the Lady of Shalott is "whispered" to be a fairy.

It is at this point in the poem that we learn that the Lady of Shalott is cursed, though even she does not know why. She is unable to stop weaving "her charmed web" for fear of the curse. That she must weave "alway" indicates that the curse is relentless—something from which she cannot turn. It consumes every moment of her existence.

No time hath she to sport and play:

A charmed web she weaves alway.

A curse is on her, if she stay

Her weaving, either night or day,

       To look down to Camelot.

She knows not what the curse may be;

Therefore she weaveth steadily,

Therefore no other care hath she,

       The Lady of Shalott. (37-45)

The Lady of Shalott cannot turn away from her work because of the curse, so she views the world of Camelot through a mirror, and what she sees she delights in weaving into her tapestry.

The last four lines of the poem also further a sense of mystery. The Lady of Shalott has left the loom, climbed into a boat, floated down the river while chanting and singing her last song, and has died. When the townsfolk behold her, they cross themselves as if to ward off evil. We learn from a parchment on her chest that the curse has been broken, but this is mysterious as well. We may assume that her death has broken the curse.

"The web was woven curiously,

The charm is broken utterly,

Draw near and fear not,—this is I,

       The Lady of Shalott." (168-171)

The web has been "woven curiously," but the reader is given no clear information as to what this means, only that "the charm is broken utterly" and it is no longer cause for fear.

[The ending varies, depending upon the version one reads.]

Tennyson uses visual imagery and auditory descriptors to further themes of isolation which propel the narrative of "The Lady of Shalott."

Consider the visual imagery in the beginning of the poem:

On either side the river lie
Long fields of barley and of rye,
That clothe the wold and meet the sky;
And thro' the field the road runs by
To many-tower'd Camelot;
The yellow-leaved waterlily
The green-sheathed daffodilly
Tremble in the water chilly
Round about Shalott.

Willows whiten, aspens shiver.
The sunbeam showers break and quiver
In the stream that runneth ever
By the island in the river
Flowing down to Camelot.

There is a vivid, living, natural world outside the confines of the Lady of Shalott's imprisonment. And the colors of the natural world stand in sharp contrast to the "four gray walls" that hold her.

She desperately longs to be part of this world and to break free from her imprisonment. She longs for human connection and is "half sick of shadows" resulting from existing instead of living.

Finally her yearning for human contact reaches its climax when she spies Lancelot through her mirror. The visual imagery is compelling:

His broad clear brow in sunlight glow'd;
On burnish'd hooves his war-horse trode;
From underneath his helmet flow'd
His coal-black curls as on he rode,

It is too much. She must gaze upon the wonder of Sir Lancelot, and she breaks the established rules and looks directly down on Camelot.

Immediately, there are consequences, and the auditory descriptors note the angry response of the natural world:

In the stormy east-wind straining,
The pale yellow woods were waning,
The broad stream in his banks complaining,

(Bold added for emphasis.)

This is a different natural world than the serene beauty the Lady of Shalott viewed from her confinement. The theme of isolation continues. She leaves her imprisonment alone. She goes to the stream alone. There is no Lancelot awaiting her in the boat; thus, she must enter it alone. The auditory descriptors reflect the misery of her continued isolation:

A longdrawn carol, mournful, holy,
She chanted loudly, chanted lowly,
Till her eyes were darken'd wholly,
And her smooth face sharpen'd slowly,
Turn'd to tower'd Camelot:

The Lady of Shalott dies while singing her mournful song. Her efforts to connect with the natural world are a failure except in her death.

The second part of your question asks how the reader knows the intent of the imagery. I would suggest using different colored highlighters to mark places where you see visual and auditory clues and then examine the context of those descriptors. Do they paint an overall positive image or a negative one? Does the imagery change over the course of the poem? Also consider the tone and the theme and try to determine how the descriptors contribute to those end goals of the poet.

The speaker of Tennyson's "The Lady of Shalott" switches back and forth between visual and auditory imagery to reveal the story.

The poem opens with visual imagery of nature, freedom, and movement (which is touch, actually, but the visual does dominate).  Around Shalott, the willows are white (visual), the aspens quiver (touch), the waves in the river run forever (sight and touch), by the island in the river (sight) (lines 10-18).

But in lines 28-36 auditory images predominate:  the reapers "Hear a song that echoes cheerly (auditory).  This is how the lady is known:  no one has seen her wave her hand, stand at the window, or knows her at all.

Another switch from visual to auditory occurs in the shift from lines 73-81 to lines 82-90.  In the first stanza Lancelot is described visually:  he rides like a bow-shot, rides between the barley, his image dazzles into her mirror, his armor shines like flames, as does his shield.

In the next stanza, the imagery changes to auditory:  the bridle bells ring merrily, his equipment belt holds a bugle, and even his armor rings.

All this fascinates the Lady, but what inspires her to actually break the curse and look out the casement or window, is Lancelot's song:

He flashed into the crystal mirror,

"Tirra lirra," by the river

Sang Sir Lancelot.

She left the web, she left the loom,

She made three paces through the room,

She saw the waterlily bloom,

She saw the helmet and the plume,

She looked down to Camelot.  (106-113)

Imagery makes abstract ideas more concrete.  With the visual and auditory imagery, Tennyson makes concrete his ideas.  That helps the reader understand what he is revealing.  For one example, the Lady first sees Lancelot blaze into her mirror, and then hears the ringing of his bells and armor, followed by his song.  These images concretely reveal what makes the Lady look out the window and break the curse.  The speaker could say that the Lady sees Lancelot in her mirror, and hears him outside, and therefore goes to the window and looks out.  But all that is abstract.  The images make it concrete.   

"The Lady of Shalott" is a Victorian poem based upon the Arthurian legend; that is, Camelot and the Knights of the Round Table, especially Lancelot. It is also believed Tenneyson used the story of Elaine of Astolat for the Lady's description. I may suggest that this poem also reflects the manner in which Victorians viewed women. The Lady is cursed to weave a web continuously. She may not gaze upon the world except through a mirror. Upon looking at Lancelot, the mirror shatters, and the Lady of Shalott obtains a boat to float down the river to Camelot for Lancelot's sake. She never makes it to her destination; she dies beforehand. Thus, we have the Victorian's view on women who are not allowed to take part fully in worldly life and who are beautiful objects at which to look. Scary, isn't it?

Many critics have said that the lady in "The Lady of Shalott" represents the plight of the artist.  She, like artists, are isolated, and once she is able to leave the tower because she had looked outside of the tower with her own eyes, which she isn't supposed to do, she is set free into reality and dies because of it.  eNotes states that

The Lady is thus presented as an artist, more involved in her creative version of her indirect experience than with life experience itself. Indeed, she represents the nineteenth-century emphasis on the problems and issues connected to the artist's subjectivity.

Therefore, the art that artists create is much richer and more complex than what is in reality, which is flat and not as rich.

Tennyson reveals the characters in this poem through visual descriptions, and the use of sound. Since the Lady is not permitted to look directly out the window, she views the world through a mirror, looking at the reflections of those who pass her tower, relying heavily on what she can hear. 

We are introduced to the Lady of Shallot through the use of sound.  The reader learns that a farmer hears her singing.  The fact that the woman is heard singing suggests that she is content or happy with her confinement.

Tennyson creates a visual image for the reader to understand the character that is stuck in the tower, by imagining her happily singing and doing needlework. 

The lady's attitude changes, however, when she sees a glimmer of armour in her mirror and hears Lancelot singing.  She doesn't really see him, but rather falls in love with his voice, after she hears him singing.

Finally, when the Lady decides to leave the tower, the descriptions are visual again.  The poet describes her actions, and her death.  We learn more about the character through her actions, her determination to get to Camelot and Lancelot.   In the end, she is recognized by Lancelot, he looks upon her and remarks that she is lovely.

And they cross’d themselves for fear,
       All the knights at Camelot:
But Lancelot mused a little space;
He said, ‘She has a lovely face;
God in his mercy lend her grace,
       The Lady of Shalott.’  (Tennyson)

Tennyson uses imagery to reveal the character of the Lady. "There she weaves by night and day a magic web." The Lady is caught in the trap of weaving, is not able to make her own decisions. When the curse comes upon her, she lies "robed in snowy white," in her virginal state to drift toward Camelot. The Lady is seen, again, unable to act upon her own will and arrives "dead pale" to her destination. Through this imagery, the character of the Lady is seen as virginal, pure, and helpless. One way that Victorians viewed women!

There is always mystery in why poets write poems at all, and even more mystery in why they write specific poems. Nonetheless, it is far from surprising that Tennyson wrote a poem about Elaine of Astolat. The first and most obvious reason is his personal fascination with the Arthurian legends, the stories in which formed the basis for many of his poems. Connected to this is the position of Arthurian mythology within English literature. The stories of King Arthur and his court are the closest thing England has to a national epic, and it was natural that an ambitious young poet would want to write about them.

Beyond these motives, however, is the way in which the Lady of Shalott's story works as an extended metaphor for the life of the poet or other creative artist. The Lady spends her life in isolation, weaving a beautiful tapestry and watching the outside world in a magic mirror. In order to create her work, she must keep the world at a distance. While the Lady of Shalott defies the curse and dies, Tennyson remains a detached artist as he describes her doing so. He is able to explore the boundaries of art without transgressing them by sending his character out into the real world to die.

Tennyson creates a picturesque poem with imagery.

"The Lady of Shalott" is a narrative poem, or a poem that tells a story. You could read any stanza and find it full of images. Thus, the poem is full of images that involve the senses: sight, yes, but also sound and touch. Your question relates mostly to sight or visual imagery.

In stanza two, for instance, the island area is filled with white willows, and "aspens quiver," "little breezes dusk and shiver/Through the wave that runs forever/By the island in the river/Flowing down to Camelot." These are visual images--flowers, wave, flowing river--with a little tactile/touch imagery included: the breeze that blows.

The island area is contrasted with Camelot:

Four gray walls, and four gray towers,

Overlook a space of flowers,...

The colorful island and river contrast with the gray of Camelot.

Imagery gives concreteness to ideas. The Lady sees Camelot only through her mirror, her art. The reader sees the setting through imagery, similarly to how the lady sees Camelot--only through the images that she sees in the mirror and creates as she weaves. The reader sees via the imagery of the speaker, however. The contrast between color and gray is seen only by the reader.

The Lady can never reach Camelot as she sees it, because that Camelot doesn't exist. It isn't real or actual. It exists as she knows it only in her art--her imagery.

One difficulty with the question as phrased is that in the poem "The Lady of Shalott" Tennyson is not directly portraying Victorian women. The poem is explicitly set in the middle ages in the time of the round table, and thus the woman who sacrifices all for her unrequited love of Sir Lancelot is not a Victorian, but a medieval, woman.

Another question is whether the picture of one woman is meant to represent all women or just one specific individual out of Arthurian legend. In "The Princess," Tennyson's longest and most profound poem about women, the eponymous heroine is portrayed as strong, intelligent, and advocating women's education. So we might look at Tennyson's medieval women as exemplifying "the bad old days" before the more enlightened society of Victorian England gave women additional rights and freedoms and assume that the poet's attitude was condemnation of the subservience of women. This might be a good biographical reading as Tennyson saw dominance by his future father-in-law over his future wife as a source of much misery.

You might like to consider how the Lady of Shalott presents us with a very idealised depiction of a woman. The Lady of Shalott is beautiful and locked away from the world and is not able to cope with reality, only being able to look at the world through a mirror and seeing its reflection. Is there a sense in which this poem therefore presents women as bystanders in the world rather than actual actors who can participate and make a difference?

The answer to that depends on your interpretation of the poem as a whole. If you understand it to be an allegory (more or less) about women's position in society in Victorian England, the "cloud of mystery" signifies society's lack of understanding as well as the ideology of the "angel of the house," made popular by another poet, that celebrates woman by putting her on a pedestal of domesticity to be adored but limits her power in doing so.  If you interpret the poem to be about the function of art in relation to society, the "cloud of mystery" sign-fies art's distance from society art lodged in an ivory tower, where no one understands it.