It decreases the distance and decreases the depth of field. If the person or thing being shot occupies the same percentage of the picture, the depth of field (the region that appears well defined) is actually the same whether you are taking pictures with a wide-angle zoom lens or a telephoto! You will, of course, have to go closer with a wide-angle lens or further away with a telephoto zoom lens to keep the same subject matter size.
The reason why longer lenses may actually create a shallower depth of field is their narrow position of view: in comparison to a wide zoom lens, a telephoto will fill up the picture with minimal background, highlighting any blur. Utilize this characteristic to include a specialist blur in your portraits.