reset 2 generation

Does "reset 2 generation" mean this is a 2nd gen iPod shuffle?

How to reset IPod Shuffle back to factory setting using Window 7?

It's done using iTunes, not directly from Windows. Assuming you already have iTunes installed, with the current version, here's a screenshot of the shuffle's device button in iTunes (upper left corner of iTunes window)

Click that button (circled in red) to show the shuffle's settings screen (shown below), which has the Restore button (and other controls) for the shuffle

This shows a 1st gen shuffle (already had this screenshot handy); it's the same for a 2nd gen shuffle. Doing a Restore erases the shuffle, reinstalls its software, and sets it to default settings (which is the "factory" condition).

Is this a 2nd gen iPod shuffle? Not clear from your info... If you're not sure, this document shows the four types

Identify your iPod model - Apple Support

Are you using the USB docking cable that came with it; it is long with a "mini-dock" at the iPod end? The short docking cable that comes with 3rd and 4th gen shuffle does not work with 2nd gen shuffle (the connector is different).

If you're using a third-party (not Apple) replacement cable, it needs to be described as being for 2nd gen shuffle (not 3rd/4th gen).

But when I connect another one. It shows up fine

So you have another shuffle... Is that one also 2nd gen?

If you're using the proper docking cable for 2nd gen shuffle, and that same docking cable works fine with another 2nd gen shuffle, there may be a hardware problem with the one that does not connect. For example, the headphones jack may be worn out and not connecting properly for data.

When you connect it (the one with problem), watch shuffle's small light. Does it come ON when you connect it to computer's USB port? If it does, does it initially blink? Or does it come ON and stay solid (does not blink)? Or does it not come ON at all?

If light does not blink, that means it is only connecting for power, to charge the battery, but not for data. When shuffle has an active data connection to the computer, like when iTunes syncs shuffle initially, the light blinks.

My guess is shuffle's headphones jack is faulty, and it's not connecting for data. If you have two docking cables, be sure to try other one. The other plug's shape (and wear) may be minutely different and allow a data connection.

It's possible there's dust or debris in the hole, blocking data connection. Shine a flashlight into the headphones jack, to see if there's anything obvious.

You can also insert regular headphones plug into the headphones jack, and turn it back and forth, in a circle. If there's corrosion on the contact points, that may help.

A red light (when connected to computer) indicates an error. The USB port may not be supplying enough power (probably not if other shuffle does not have this problem). OR maybe shuffle's battery is worn out and no longer taking a charge.

If you have a USB power adapter, like the one that comes with iPhone or other device, try plugging it in and connect shuffle there with docking cable. Does the shuffle charge from a USB power adapter? You should get a solid orange light while charging (green when fully charged).

Does it still play songs that it already has loaded, when disconnected?