The CAGED system can be about a whole lot more than just chords. As JonPR said you can link scales to each of those chord shapes and use those scales to play melodically or improvise in any key anywhere on the fretboard. Around each of those five shapes you can visualise a root, IV and V. There will also be a ii, a iii and a vi. Of course most of this information is only going to be of use if your playing is up to the standard where you can actually play with it.
It's not the case that you have to learn CAGED before you play melodies or scales. You'ld do just as well or be better off learning lots of tunes first.
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