the pulverization of the hop material in the pelletization process reduces the material to mere flecks of vegetal matter thus increasing the surface area in the wort (supposedly). The rupturing of the lupulin glands provides for an easier breakdown of the oils (Alpha and Beta Acids) that are the compounds that provide the bittering, flavoring, and fragrance to our beers. the actual plant material is nothing more than a "wrapper" so to speak.
Pelletized hops calculate as a 10% increase in utilization, that is how much of the oils are extracted into the wort but at a cost to total available. It's suggested taht the processing causes a 10% or greater loss in total oils due to the rigorous manner in which they are handled in teh machinery.
Given the compact nature of the pellets, they are less suceptible to oxidative staling in that less surface are is available in packaging. the down side is that it takes a little more effort in the brewhouse to separate the material after boiling and the pellets don;t provide the break filtering aid that whole hops do.
Some suggest that whole hops provide for a smoother, fresher contribution to the wort in all respects but that is purely subjective. While they are less processed if you have ever seen what they go through to get to the bag you'd understand how much is still lost to the factory.
Whole hops come at a cost to storage space and to wort absorption. All that vegetal material can really soak up some wort in the kettle. The bags tend to take up a ton of room in the freezer too, even if you used a vacuum sealer. It's feasible to compare that the freezer space a few ounces of whole hops takes up, one could store nearly a pound of pellets.
Plugs (or cakes as you've put) are just a means to find a middle ground between the two. Some systems aren't designed to handle pellet filtering.