Naruto Shippuden: Ultimate Ninja 4 has several gameplay modes. The two that you will be spending most of your time in are Hero Mode and Master Mode, but the others are the standard Free Battle, Practice and Shop modes. But like I said, the main modes are Hero and Master.
Hero mode goes through the events of the first series in the form of memory clips. Most of these clips are cut-scenes breezing over the events from the show, but there are a good five or six battles in each of the story arcs - at least, there are the major fights like those against Zabuza, Garra or Orochimaru. As you would expect, these fights are the standard 2D Ultimate Ninja, multi-plane-style. What's odd is that the game's bigger Master Mode takes a completely different approach at fights.
Master Mode is a semi-open-world environment where Naruto runs around progressing the Shippuden story. Actually, the game starts off with an original story that takes place not long before Naruto returns to the village. In this story, Naruto has to help save a small village that is constantly hounded by a demon.
After that story wraps up, Naruto returns home and the events of the first 20 or so episodes take place as Naruto and Sakura once again join Kakashi's team as they re-start their hunt for Sasuke and end up taking on a couple of Akatsuki members. What I found odd about this mode is the fact that Fights mode aren't the standard Ultimate Ninja-fare. Instead, they feel much more like an action-platformer form of fighting. Button-mashing causes Naruto to unleash a torrent of random attacks in a 3D environment and very little thought or strategy is needed here.