Hello my friend! This question is a good one. I’m going to try and break it down so hopefully you can understand. If you need any further clarification I’ll make a video to help
When reading actual sheet music, you should try to think of things harmonically like for chords. For example, if you see a C note is lower on the treble clef than the E, and the E has a G above it, you would assume to perhaps play an open C major chord.
However, if the G in that C major chord has many different ledger lines and it’s way above the treble clef, you would assume that depending on how many ledger lines it has, that G could be all the way up on the high E string of the 15th fret or even higher.
Just like in piano sheet music, guitar sheet music has many different positions. Like “Middle C” on a piano is the C note in the middle of a piano. It’s represented by the note below the staff with one ledger line. On guitar that is the A string of the 3rd fret. So you start looking at chords in guitar music harmonically and not just as individual notes, you can start recognizing the chord position and where it should be played.
So then you read your sheet music and you have to look at all the notes whether played melodically (one at a time) or harmonically (strummed like a chord) and you start to recognize the patterns of where you are suppose to play.
In conclusion, the more you know your scale positions and chord positions the easier it will be to recognize what is practical to use. I hope that made sense