What you have experienced is the norm for most Canon consumer printers. The drivers do not work across mixed networks, such as when they are shared from Windows computers.
So if you want to continue connecting via the Windows share, you will need to install the Gutenprint drivers available from Sourceforge (
http://gutenprint.sourceforge.net/index.php3). Version 5.1.7 has the CP720 as a supported printer, and I assume that later versions would also support it.
With this driver set installed, when you browse with the Print Using menu, you will see the 'Canon SELPHY CP720 - CUPS + Gutenprint v5.x'. Select this and you should be able to print.
Note that the Gutenprint driver may not give you as many features as the Canon driver. So if you want to use the Canon driver, it should work if the printer is shared from the Time Capsule.
PaHu