The shooting goes on for a while, then gradually stops. Howie peeks his head up/out from behind the couch and sees bodies all over the place.
Questions.
Is "gradually" used correctly?
Is "up" and "out" both natural? Is there a difference between them?
Yes.
"Shooting" that goes on for a while is referring to firing bullets repeatedly, not firing a single bullet. The shooting stopping "gradually" would thus refer to the firing of bullets not stopping all at once or suddenly but instead to it happening less and less often in a protracted process of stopping, the shots, or bullets fired, becoming increasingly few and far between until they stop altogether.
It would be no different than "gradually" stopping smoking, another activity that is comprised of a series of acts, a series of cigarettes being smoked instead of a series of bullets being shot. Some people quit smoking cold turkey, while others quit "gradually," the cigarettes they smoke becoming increasingly few and far between until they stop smoking altogether.
So, yes, "gradually" is being used correctly in your example. Not only is its usage grammatically, semantically, and/or syntactically correct, but it is also quite typical.
It is arguable that "gradually" is used correctly. But it is kind of subtle. Probably most readers would not be bothered by it.
"Gradually" indicates something changes slowly. You can gradually slow down a car. You can gradually increase the temperature in your oven. You can gradually increase the depth of water in a bathtub. Note that all of these examples are continuous.
However, "shooting" comes in discrete shots. Each shot is a discrete event. So it is a little bit odd to say that something that comes in individual discrete events could gradually stop.
Also, "stopping" is not a gradual thing, but an end point. You could say "he gradually moved along the couch, eventually arriving at the TV remote control." But you would not say "he gradually arrived at the TV remote control." Here too, you want "gradually" to apply to something that is continuous, that can change slowly.
So you might say something like "the rate of shooting gradually decreased then stopped." Or you could say that "the shots gradually came farther apart then stopped." Or you could say "the shooting gradually tapered off then stopped." That is, the thing that is changing gradually would be something that is continuous.
But, as I said, most readers probably would not be bothered by it.
