(OOC: I'll bump this just for fun, since I haven't commented yet)
Erekose, you gave me an interesting idea on the shackles--what if they didn't discharge? Compared to Hideous Laughter, a version of this spell that doesn't go away until the time limit ends gives the same Will save but allows them to perform some actions if they like (unlike Hideous Laughter) and others if they are willing to take damage. Throw in an Escape Artist check like Patlin suggested (maybe DC 20) to try to act without taking damage (though you don't actually escape the shackles, as they move with you), and you've got a neat level 2 spell
As to the shields, I'll echo the sentiments of others in saying that the current state is likely a bit strong for a level 2 spell--actually, it is a bit wonky because when you can first learn it at level 3, it is actually arguably not as useful as Shield (lower AC bonus total and doesn't stop Magic Missiles). However, it rapidly increases in utility until it peaks at level 10, where you can give a slightly superior Shield (+5 AC) to two targets or a weaker Shield (say +4 +3 +3) to three, etc. In a group of size 5, you'll expect probably at least one character on average will already be using a shield, so if the caster gives himself a normal Shield spell, he can probably provide nearly equivalent value to the rest of his group with this spell, making it almost as good as Mass Shield. Going from a touch range to a Mass spell is generally +4 levels, and normal Shield is Personal, but admittedly this is not quite as good as being Mass.
If you did something like 2 mini-shields per caster level (max 20, perhaps), with a cap of 4 shields per ally, that could work. Another idea is to keep it at level 2 and make it an ablative shield, though this requires a bit more knowhow on the part of the GM--it's a really neat image though. Basically, with this idea, every time an attack misses the player but would have hit them without the spell, a mini-shield dives in front of the attack and shatters, giving them one less mini-shield and thus lowering their AC by 1.