Shotcrete would be a great substitute for the retaining wall. Design-wise, the shotcrete is equivalent to concrete because shotcrete is really just a way of placing concrete.
The No. 4 (No. 13M) at 18 in. (450 mm) on-center spacing is not a problem. A No. 4 (No. 13M) bar can be easily encased by a qualified, experienced nozzlemen using either wet- or dry-mix shotcrete. In longer walls, or anywhere where reinforcing bars are lap spliced, the lap splice bars should be spaced apart. ACI 506R-05, "Guide to Shotcrete," Section 5.4, provides some good guidance on optimizing reinforcing bar layouts for shotcreting. On the issue of lap splices, it says: "If the design allows, direct contact of the reinforcing splices should be avoided. Non-contact lapped bars should have a minimum spacing of at least three times the diameter of the largest bar at the splice."
Thus, with No. 4 (No. 13M) bars in a lap splice, you should have the reinforcing bars spaced 1.5 in. (38 mm) apart at the splice to allow the shotcrete material to flow around the bar during shooting.
Chapter 8 of ACI 506R-05, "Guide to Shotcrete," also provides a lot of guidance on proper shooting techniques for a variety of applications, including walls.