Yes, you are correct, the emacs editor just edits text, it's just another unix editor.
I should disclose that I do not normally use emacs. I use vi (vim). But there is nothing wrong with emacs. emacs works fine. But it's probably a good idea to pick one or other other (vi or emacs), really concentrate on it, get it into your fingers. There is a topic about "favorite editor" that seems to indicate a strong preference for vi, so just possibly it might be a good idea to consider learning vi instead:
https://www.unix.com/unix-dummies-que...ryone-use.html
Yes, you just type cd, space, path, and then press Enter key. And the same thing for the file: emacs, space, then abc.cgi or whatever the name is.
Do's and dont's are just to make sure you don't mess anything up. For example, even besides being very counter-intuitive for new users, vi is infamous because it's easy to press the CAPS-LOCK key by mistake, and then all the commands are totally different and extremely confusing. Once it's happened a few times, the user knows about it. But the first time, it can be pretty scary.
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Once i open a .cgi file how do i understand the code?
That is a very complicated topic. You probably know that the CGI program sits on the server. The CGI program can be written in a compiled language, bash, perl, python, etc. The CGI program reads data from the browser (using either POST or GET), and then sends data back to the browser (for example, sends a new web page). The only way you are going to understand the CGI code is start with something simple, and read a book about CGI. I should note that CGI is pretty complex, especially because it can be hard to troubleshoot, because there are multiple things going on (client, server, CGI program). CGI is very useful and important.