We study the physical and kinematic properties of the narrow-line region (NLR) of the nearest obscured quasar MRK 477 (z = 0.037), using optical and near-infrared (NIR) spectroscopy. About 100 emission lines are identified in the optical+NIR spectrum (90 in the optical), including several narrow optical Fe+ lines. To our knowledge, this is the first type 2 active galactic nucleus (AGN) with such a detection. The Fe+ lines can be explained as the natural emission from the NLR photoionized by the AGN. Coronal line emission can only be confirmed in the NIR spectrum. As in many other AGNs, a significant correlation is found between the lines' full width at half-maximum and the critical density log(ncrit). We propose that it is caused by the outflow. This could be the case in other AGNs. The nuclear jet-induced ionized outflow has been kinematically isolated in many emission lines covering a broad range of ionization potentials and critical densities. It is concentrated within R ˜few×100 pc from the central engine. The outflowing gas is denser (n ≳ 8000 cm-3) than the ambient non-perturbed gas (n ˜ 400-630 cm-3). This could be due to the compression effect of the jet-induced shocks. Alternatively, we propose that the outflow has been triggered by the jet at R ≲ 220 pc (possibly at ≲ 30 pc), and we trace how the impact weakens as it propagates outwards following the radiation-pressure-dominated density gradient. The different kinematic behaviour of [Fe II] λ1.644 μm suggests that its emission is enhanced by shocks induced by the nuclear outflow/jet and is preferentially emitted at a different, less reddened spatial location.