A poncho can be used as your primary shelter and rain gear, but it is not the BEST solution. It is versatile piece of gear, but specialized gear is better. In the Army, we did not move around wearing a poncho, it is not "tactical". We got wet, and you could wear the poncho when stationary. I think I used it more to cover my gear than to cover me. So I did not bust brush wearing a poncho, and as AKSAR says, that would be difficult, and noisy. We did not even wear rain jackets or pants when moving tactically. You got wet, it was uncomfortable, and you dried out later, if possible. Only in more extreme winter conditions did you wear more and try to stay dry, because your life depended on it in those conditions. The coldest I have ever been was actually in the mountains in Latin America, in the rain and with a high temperature of about 40 degrees F. in a tactical situation. Once I could, I wrapped in a poncho and poncho liner and buried myself in grass and leaves. I did not die of hypothermia, but I was not cozy either.
A poncho works for times when you have to choose one piece of gear to perform the functions of rain protection and shelter. It is also a decent ground sheet. I recommend a poncho as a part of a basic kit for a day hike, backpacking in general and especially for kids. A brightly colored poncho is good shelter, weather protection and makes them more visible. Psychologically it helps to keep them in one place and together as they like to put more than one kid under the poncho.
When tying off the hood to make a shelter (or poncho hooch in the military slang), I would pull the draw string tight, twist the hood and then fold it over. Use the draw string to wrap tightly around the folded portion, and I would use a simple half hitch to secure it as that comes out easily. The draw string also serves as place to tie a cord to to pull the center out a bit to make it more stable and not collect water in a depression around the hood. Without trees around, you need poles to set up a poncho hooch, which would make me lean toward carrying a small tent as well. The tent for me and the poncho for my gear.
You can use small S-Biners or some such device that is easily removable to attach the cord to the grommets. It would be difficult to walk with those cords hanging all over the place, and they will not stay tied when walking through the brush. I used to use a simple bowline, but that can be a little difficult to untie in some circumstances.
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