Hint: You can counter melee attacks from the front if you press the "Melee" button at the correct time.

The stakes in Cautious Hero mostly hit in the latter half of the show, where certain choices he makes drastically affect the outcome of the final battle.
As for why he's a no-nonsense overly-cautious asshole without getting too into spoilers, I'll just say he wasn't always a cautious person, the opposite in fact, and it cost him dearly.