CTL32.DLL was a library used in some win3.1 delphi programs which simulated there being a mysterious floating light above your left shoulder which only shone on windows UI elements...
Microsoft thought it was such a good idea, they built it into win95's GDI... and that is how "3D Elements" came to be in the "Appearance" Property sheet.... This was probably the biggest shinyness factor in win95's UI.

For most people, the thrill wore off pretty quick once they got to know windows; so microsoft decided that rather than improving usability and stability, they needed to make windows look even shinier... so they made Plus!... and IE4 with ActiveDesktop.. but that still didn't help...

In win98, microsoft introduced smooth scrolling (read: slow scrolling), menu slideout, mouseover effects for menus and gradiated titlebars (as seen in MS Office 97)... yet still hadn't managed to make any leaps and bounds in user interface design.. (okay.. the address toolbar is pretty damn cool)

But who needs stability when Win XP has Alpha Blending effects, and big shiny primary colored buttons...?