There are many situations, depending on the role you have and what you feel is proper for that role.
If you are in the 'rhythm guitar' role for a song (or part of the song) then you generally play mostly chords, perhaps a few passing notes between chords. This would be how you back up a singer.
If you are in the 'lead guitar' role, then you might play only the notes, or at other times play some chords and some/all the notes, or at other times play all the chords and some notes. The notes will often be within the chords.
If you are playing solo (such as a ballad) then you would have some combo of chords and notes. Like something James Taylor might play.
You can also look for some thing Kirk's done called 'chord tones' - search the forum for those. He plays both chords and notes.
I thought of another example - the old song 'Love Me tender'. Chords - upper case, notes lower case.
So you might play LOVE me tender LOVE me true TAKE me in your HANDS
And there are more roles,
slide guitar for example and finger picking.