It is up to the plug-in developer to expose automation and implement whatever they choose from the MIDI spec.
Most synths use MIDI data and CC events are part of that data stream. Just like MIDI note data tell the synth what note/velocity/how long to play, CC data can instruct the synth to do actions such as sustain or modulate audio.
Cakewalk can send CC events using an automation lane, as part of the MIDI clip or both. When CC events are recorded as part of a MIDI clip, they are edited in the CC lanes of the PRV. It does not matter if the CC data is created in an automation lane or recorded in the MIDI clip, they are both part of the MIDI data stream.
The plug-in automation is sent using a different data stream. Most synths listen for both automation and MIDI data streams. Most effect plug-ins just listen for automation but some also listen for MIDI data (for example those with MIDI learn capability or VST MIDI plug-ins).
There is also automation for certain DAW functions such as track volume, pan and mute.