Shakespeare is credited with coining those terms because they first appeared in his works, but in many cases they may have been in popular use already. He was just the first to put them on paper. Those he coined himself would have been intelligible then as now because of context. Play watchers would have had no more or less trouble than a modern day English speaker hearing a new slang word like 'fam' for the first time.
"Early Modern speakers and writers were alive to an endless progression of meaning, using language as a route into a flux of representations, not as a set of containers in which to bottle up meanings" (Hope, Shakespeare and Language, 13). This is especially true as a systematized standard for meaning in language as promoted by education was only in its infancy in Early Modern England. Furthermore, Shakespeare and his contemporaries were more familiar with Latin as a literary, courtly, and oratory language. Shakespeare's genius lies in his ability to place Early Modern English in a site of intersection between the educated, the everyday, and the dialectical. He is a master at stretching syntax to work with his word choices (see Hussey, 65-90). Let's look at a quick example: Hamlet's reference to "shuffle off this mortal coil." He was able to draw from Latin roots of English words to give a sense of the erudite philosophical thinking underlying Hamlet's thoughts. In particular, the word "coil" is cognate with the Latin "colligo," meaning to gather or bind together. But there is a visual symbolism at work in the use of the word that brings to mind the effort of coiling in the professions of laborers that was, for Early Modern audiences, commonly applied to the toils and troubles of everyday life. And that gets at the specific answer to your question. The fact is that Shakespeare was the first to PEN the words of his day. While it's certainly likely that he "invented" a few new words, it's unlikely that such a number is anywhere as high as 1700 (in reference to your question). His audiences would have had little trouble in understanding even uncommon, unfamiliar, or unusual words as his ability to use the meter for stressing syllables alongside the performances of beloved actors would have contextualized the words and aided in the reception of their meaning.
References:
Alexander, Catherine M.S., editor. Shakespeare and Language (New York: Cambridge University Press, 2004).
Hussey, S.S. The Literary Language of Shakespeare, 2nd Edition (New York: Routledge, 1992).