Well specifically it melts at a lower temperature because it's mixed with milk. The cheese part doesn't separate from the milk due to the additive, which is called an emulsifier. That also might sound artificial, but it's just the name for things that keep fats from separating from water and water-soluable foods. For example egg white is another emulsifier, and it's used in making mayonnaise.

Also 100% agree with American cheese being real cheese. It's not the best in every place you would want cheese, but that's true of any cheese. I don't want blue cheese on my nachos, and I don't want American cheese in my salads. But it's great on meat, and it's a good complement to a lot of warm foods.