Can you please review here http://helpx.adobe.com/photoshop-elements/using/cropping.html#use_the_cookie_cutter_tool and check if all the steps are done fine? Also just try in new file say go to File->New->Blank File and use on it.
I'm not trying to use it as a photo tool, I'm trying to use is at a shape like you would in a paint document and then I want make some features on it.
For this purpose you don't want the cookie cutter tool.
Use the Shape selection tool (keyboard "U"), then select a shape and drag it out to suit.. It should show up on a separate layer above the background.
Yes, what hatstead said. The cookie cutter is for cutting a shape out of a photo, so it's normal that if you're cutting out nothing you'd still have nothing when you finished.