It's the same issue: the audio input is for apps that want to sample audio, whereas the CD Player App only wants to be able to control the selection of tracks and getting the CD player to play/fast forward/ pause/rewind them (and eject the CD). A Mac with an internal CD player has physical wiring from the CD ROM audio out to mix with the Mac's audio out with an adjustable mix level. It doesn't go through the audio in. It does it this way for early CD ROM players to eliminate CPU usage.
It's possible for a Mac to read an audio CD and play a track back in software, but then it's being played back through QuickTime. For example, you can insert a CD and it appears on the desktop. You open the CD icon and you see a number of files, which are the tracks on the CD. Drag a track to the hard disk and it'll copy it in probably an AIFF format (and take up 40MB). Open QuickTime and then open the copied audio track on the HD: the audio track would be being played by the Mac over QuickTime.
However, the audio routing again doesn't go through the audio in, it goes out of the data port at the back of the CD ROM (IDE or SCSI) and is streamed to the Hard Disk or perhaps QuickTime. The difference is that this takes up a lot more CPU. On faster Macs, this is the normal mechanism, for example, an iMac G3 doesn't use any audio connections from its CD, it all goes through the IDE interface and the G3 is fast enough to keep up. My LC II on the other hand would normally route audio out of my PowerCD's audio jack, because it only has a 68030. But I could copy an audio track to the HD and also play the file (it's fast enough to play AIFF).