That run-time difference will just be the PAL format speed-up effect :)
Your Region 2 widescreen DVD is in the PAL video format, and your Region 1 "pan & scan" DVD is in the NTSC video format. There's no difference in content, it's just that PAL video material runs slightly faster than the correct speed: 25 frames per second instead of 24 frames per second, giving a speed-up factor of 4%, and 103 minutes plus 4% equals 107 minutes. This is true of all PAL DVDs, not just "The Shadow."
As for the picture ratio ... based on your observation, it seems that "The Shadow" was shot in the "open matte" format. Basically, this means that the film was shot using the full open frame of film (1.33:1) but was intended to be masked (i.e. "matted" or "cropped" at top and bottom) for 1.85:1 cinema presentation.
Your widescreen (matted) version is therefore true to the original cinema presentation, and shows the film framed as the director intended it should be. Your "fullscreen" presentation simply leaves the matte off, making the whole frame of film visible - avoiding the need to pan & scan by revealing additional picture information at the top and bottom which you were never meant to see.
Look up "open matte" on Wikipedia for a picture that illustrates this very neatly.
So, technically, neither presentation of "The Shadow" is "pan & scan" - the widescreen version is matted, and the fullscreen version isn't.
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