The Playland Crazy House in The Lady From Shanghai (1947)

Rita Hayworth in The Lady from Shanghai (1947)
If you're a romantic, you're going to see Orson Welles as a visionary artist, subdued by the wicked forces of the studios, and you're going to treat all his idiosyncrasies of technique as ahead of their time, and signs that he's the greatest director there ever was.

If you're a realist, you're going to see Orson Welles as someone who treated the cinema as a toybox, and failed to realise the needs of viewers, a non-commercial experimentalist who struggled against studios who were only trying to recoup their investment in him, when they cut and changed his films.

There's no doubt that in terms of innovation, Welles got away with plenty. In The Lady from Shanghai, as in a few of his other productions, there are beautiful crane shots, unusual close ups and many plot non-sequiturs for which you must simply suspended disbelief.  His sudden close ups in The Lady From Shanghai can be confusing, simply because the close up is a way of telling the audience that someone or something is important.

This isn't always the case however . . .
The scene in The Crazy House that concludes The Lady from Shanghai was supposedly twice as long as we see it, because the studio at the behest of Jack Cohn cut it.

Despite how marvellous the scenery and setting is, the studio probably made the right decision here.

After the amazing court room scene, which is absurd and comic, there is a nifty little chase into a Chinese theatre, before we get to this epic finale

Rita's change of hair was a huge controversy at the time. Studio boss Jack Cohn, mad about her, hated it. And the changes remains a testament to Orson Welle's own persuasive ways ...

The scene in The Crazy House that concludes The Lady from Shanghai doesn't bear analysis of the 'the cinema is a mirror of our souls' type, but it is better understood as a way of maximising screen space, to allow multiple images, as a change from the usual frame.

Having said that, the mirrors do represent the plot of The Lady from Shanghai quite well.  Who is shooting at who, and what is real and what is not? All good questions. No good high period film noir exists without duplicity, paranoia and multiple viewpoints culminating in murder. So yes, the mirrors are apt.

It's said that Welles, on top of the other cuts he had to suffer, did not want any dramatic music introduced in these scenes, and yet it happened just the same, with the frustrated studio owner Harry Cohn insisting it be added. 

The audio which accompanies this denouement is telling, being gunshots and breaking glass. For fancier analysis, the mirror is not just a strikingly representative of anything you seek it to be, but for critical cineastes it is the ultimate answer:
The purity of Welles’ crystal image lies in this diegetic reiteration of broader cinematic tendencies. The mirrors optically reflect the characters and extend from the confusion and deceit that permeates the film’s plot. The actual becomes the virtual as the character’s bodies are refracted into endless reflections but the virtual also returns to the actual as both mirror and body are destroyed.

From "Critical Commons"
The Lady From Shanghai, for all its pleasures, is as grandiose as the criticism that it continues to inspire. Cinema certainly needed someone like Welles, whom we could describe best as an artist, and not a popcorn salesperson. The plot of the film, in truthfully artistic style, tells the story of its own production:

The film is narrated by Michael O’Hara, played by Orson Welles, a romantic yet naive figure with an Irish accent who has a tough-guy reputation in New York City. He spots Elsa Bannister, played by Rita Hayworth, and is straight away seduced by her beauty. She is the wife of a character called Arthur Bannister, played by Everett Sloane, who is tough in a different way, and certainly a figure of power, like the above-mentioned Harry Cohn, and a grotesque physical specimen. Later, after O’Hara discovers Elsa being assaulted, he rescues her. The three head off on an adventurous cruise, although the cruise is a set up, with O’Hara as the hapless mark. Who is setting him up, is most unclear.

There are some great details of The Playland and vintage aerial shots here at San Francisco City Sleuth


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