Poor guy. This muskrat just doesn't get much characterization beyond being a foil for Rikki-tikki, and we're sure he's got better qualities than the story shows. Maybe he's a fabulous baccarat player or something.
Chuchundra's main role is to offer a contrast to Rikki-tikki. Whereas Rikki-tikki is brave and stalwart, Chuchundra is cowardly and skittish. He only comes out at night because he's terrified he'll be killed, and even then he's afraid that Nag will confuse him for a mongoose.
To be fair, he does tell Rikki-tikki that Nag plans to attack the bungalow at night. Sure, he only tells Rikki-tikki this to save his own skin, and he's sobbing while he does so. But, technically, this means he does help in the battle against the cobras. Got to give him some credit.