Pre-shredded cheese melts just fine, although I've never tried it in a straight cheese sauce (for those I just dice a block of cheese because it's easy and cheaper). But I use it in things like lasagna or other casserole type dishes, and I've never had an issue with its ability to melt properly.
Yeah it'll melt like that. If you try in things like a cheese sauce for mac and cheese...it melts poorly into the milk and messes with the consistency/thickness.
