Insanely Innovative For Its Time
For starters, you can thank a dude named Gregg Toland for the quality of this film's cinematography. Let's not forget that this movie is from 1941. It's old. It's so old that when they talk about "The Old War," they're talking about the American Civil War, not World War I or II.
Now that you've got some context, let's dig into what really made Citizen Kane one for the books.
Citizen Kane is especially famous for pioneering something called deep focus, which means that everything in a scene is in sharp focus regardless of whether it's close or far away from the camera.
Normally when you watch a movie, you'll only see the thing that the director wants you to pay attention to in focus (the hero and heroine are obvious examples). But Welles was interested in composition as well as narration, and devised a way to make sure everything in the shot was in focus. As a result, you'll see action taking place on multiples planes: some in the foreground, some a small distance away, and some in the extreme background.
Check out this scene for an example. Note three specific fields of action: Kane's mother in the foreground, his father a little ways back, and Kane himself in the background out the window.
What's the point? Well besides giving the shot a more artistic composition (and seriously, doesn't it look pretty?), it allows Welles to make multiple points about the drama onscreen without disrupting the main action. Take the scene above. It's very important since it shows us young Charlie Kane enjoying his last day of childhood innocence with his sled. It also show us why his mother is sending him away and the not-especially-nice man she's sending him away with.
On the surface, the scene needs to be about Mom and Banker Guy talking about what's to be done with him. But by using deep focus, Welles adds in a little nugget—the happy boy and his sled—that doesn't seem to be a big deal, but sets up the famous reveal at the end.
Oh yeah, and the notion was so good that other filmmakers made use of it as well. Just one example of how Welles' efforts here defined the language of the whole darn medium.
Another big innovation in this movie is the use of low-angled shots, where you have characters shot from beneath so that you can see the ceiling in many scenes. This has the effect of making the scenes really ominous and menacing, especially when Kane is involved.
Here's another good example of filmmaking innovation in Citizen Kane: the idea of montage. The concept had been around a while, actually. Communist filmmakers first posited it as a way of "filling in the blanks" by making unspoken connections between two shots. That's a fancy way of saying that, with careful filmmaking, the audience can pick up on unspoken cues to infer meaning where it isn't directly stated.
In Citizen Kane, Welles took that notion and turned it into an art form, most notably with the famous "breakfast table" scene. It's a few brief snippets of dialogue captured over several years of Kane's first marriage, showing the love between Kane and his wife first cooling and then giving way to open resentment. The whole thing only lasts about three minutes, and yet we find out everything we need to about the dissolution of a union over the course of a few years. And thanks to the fantastic editing, he let us "fill in the blanks" without having to spend huge amounts of time explaining what happened. Talk about efficient time management.
Welles likely perfected the art of the montage with that scene, but you've probably seen countless examples of the same technique. Any kind of training scene, for example, uses montage, and commercials use it all the time since they have a very short period to make their point. Welles didn't quite invent it, but he knew how to do it right.
Put all this together, and you've got yourself a piece (arguably the most important piece) of movie history.