Laura....I'll try to give a quick watered down lesson on cheese..but I'm pulling information from the catacombs of my brain! It's been over 10 years since I've taught food and nutrition classes.
Natural cheese is made by age old methods. Milk from any animal (normally cow or goat) with any fat content is separated into curds(solids) and whey (liquid). Natural cheese are ripened or unriped. Ricotta and cottage cheese are unriped. In ripened cheeses the curds are packed into forms and aged or ripened. The ripening period determines the flavor hence words like mild/sharp on Cheddar cheese. Sharp meaning it's been aged longer. Sometimes the words soft and hard are used. When you see a hunk of parmesean cheese that you have to grate yourself...that's natural..as would be Edam or Gouda in a wax covering, Bleu and Roquefort. They are also sold in the sliced, shredded, crumbled or grated form. Vickie is absolutely correct about shredded cheeses being coated to prevent them from clumping together and they used cellulose plant products like corn or potato starch.
Processed cheeses are made from both unaged and aged natural cheeses and liquid ingredients (milk or whey) that are blended together and pastuerized so no further ripening will occur. It is not imitation. One of the reasons for processed cheeses is quality standards and the consumer can be assured that the product will taste the same everytime they purchase it. American cheese is a processed cheese...so is the government commodity cheese (do they still have that stuff?) Processed cheeses are divided into categories depending on the water content...Foods and Spreads...spreads have a higher water content. If you buy Swiss cheese that is individually wrapped with no holes in it..it's processed and most likely a "food". Velveeta and Cheese Whiz are spreads. Cheese that has had ingredients such as pepperoni, jalepeno peppers, olives added are processed cheeses because if those ingredients were added to natural cheeses at the beginning of the cheese making process they would cause spoilage.
There are imitation cheeses...lets not go there.
What is the H am I doing talking about cheese at 7:00 on a Sunday morning...oh that's right...the dog had to go out and I couldn't get back to sleep...and now she's in bed sawing logs and I'm wide awake.

My mind works like lightning...one brilliant flash and it's gone.