I don't know any technical details here, but from a user perspective Shockwave did turn into Flash. The Flash file extension "swf" even stands for "ShockWave Flash".
Shockwave was somewhat similar to Flash, but it was developed for the "multimedia" CD-ROM's, which meant the files was generally too big for online. Flash was much more compact which is why it won out.
Flash was originally called FutureSplash, if I recall correctly. When Macromedia bought it they rebranded it to fit their general branding theme, hence the confusion. Flash wasn't really intended to be an app platform, it started out as a vector animation format, but later they added scripting using a dialect of JavaScript called ActionScript.
Most users ended up with the Flash plugin but not the Shockwave plugin. Macromedia Director was huge in its day - my first programming job involved writing Lingo - but it died out pretty quick when the internet started taking off.
So had the renaming taken place now in stead of twenty years ago, it would be called F7lash in stead of just Flash.
I think that's backwards. I was there. Aside from a few e.g. banking and government applets one was forced to use and a couple of exceptions, applets never got anywhere and died fast.
Enterprise Java became what Java is all about very very soon. Java landed in 1996. Servlets/Tomcat landed in 1998.
By 2000 there was plenty of enterprise Java development - in fact that was the year MS created its own Java copy, in the form of C#/.NET after having tried to extend their version of Java for the Windows platform.