The Necrochasm is exactly what you said, forged by the power of Crota. In terms of how it works, I had always assumed a part of Crota's soul/mind is integrated into the gun. The green flames popping out, along with the ominous description the the three levels of the gun that seem to be describing the slow progression of insanity, which I think may stem from Crota whispering to your guardian or speaking to them in some form or another...