The Squidsmith is a lady of indeterminable age, with white hair and tan skin. She wears rather skimpy lilac colored gear (somewhat inadvisable considering her job in a forge) and a red headband/hair ribbon.
She seems to be passionate about her job pulverizing Heart Squids, as shown by her quotes and animations.
This lovely lass will take a stack of four adorable Heart Squids, stack them up, smash them with her fiery hammer and melt them down to make a Heart Holder, giving Shantae another health point. Like the girl in the Bath House and most other residents of Scuttle Town, she serves no other purpose in the story or gameplay.
In the Steam version of the game, there is one achievement that involved her (more or less):
Squid Savior: Complete the game without any Health upgrades and all Heart Squids collected.