I think you missed my point on the second question. I have found that I can sometimes substitute a different chord form but pick the same strings and the song will still sound good. <Confession is good for the soul - I first tried it because I was having trouble switching quickly with some of the forms in the book.> When I do that, I am playing entirely different notes. I guess standard notation would have forced me to play it "right", but I think I found something useful. I do agree that knowing notation and note names and scale positions is extremely important. I play weekly with a guitarist who is quite good and he teaches me songs verbally. My other "keep me honest" exercise is to play vocal melody lines from piano/vocal sheet music.
"First you master your instrument, then you master the music, then you forget about all that ... and just play"
Charlie "Bird" Parker