What's the difference between "shrink" file vs simply reducing the initial size?
That &quot;Initial Size&quot; label is misleading.  It's really the &quot;current size&quot; of the file.  Also, changing that number and clicking &quot;OK&quot; does a SHRINKFILE behind the scenes, so the two things you're comparing are actually...the same thing 
Here's my copy of the StackOverflow2010 database (where the current size really is 9,105 MB):

If I change that to &quot;5&quot;:

And then click the &quot;Script&quot; button in the top left of the window, this is what SSMS generates:
USE [StackOverflow2010]
GO
DBCC SHRINKFILE (N'StackOverflow2010' , 5)
GO

So the answer to your question is that these two features of SSMS do the same thing.
By the way, I highly recommend using that &quot;Script&quot; button in SSMS frequently as you are learning.  It's a great way to understand what the SSMS GUI is doing, and is also helpful in automating and overcoming the limitations of the user interface as you get more comfortable with T-SQL scripts.
Note that you should be wary of shrinking database files, see here for more information:
I Need to Shrink My Database - I just freed a lot of space
When is it OK to shrink a Database?