Why would a Shakespearean audience relate to Shylock differently than a modern audience would?

In 16th century Europe usury, the lending of money for interest, was banned for Christians (it still is for Muslims), but not for Jews. Of course Christian commerce needed banking services and generally speaking the Jews provided it. So the Jews were often 1) rich and 2) foriegn. This caused tension, jealousy, mistrust, etc.

Also, European history is littered with outbreaks of religious extremism. 'The Jews are heretics who murdered Christ and should be converted or killed.' Was this a good excuse to steal their wealth and pick on an undefended foriegn community, possibly.

Christian-Jewish relations were generally poor. In fact, in Venice, the Doge allowed Jews to settle (because they needed bankers) but only in an area of old factories called La Ghetto, (the original 'ghetto'). They were not treated badly by the standards of the day and had some protection in law, but they were outsiders and, as today, people had many ignorant suspicions about their motives and practices.

Probably the average European Christian was anti-semetic. It's a tribute to Shakespeare that he shows the relationship between Jews and Christians from both sides of the line and has two wonderful monologues where Shylock shows us the world from his side as a persecuted, 'spat on', kicked around, minority with feelings, needs, loves, griefs.

In the context of the day, this was radical multi-culturalism.