Originally Posted by: todd.tbens@gmaiMany of these positions are difficult to play on an acoustic and then on top of that trying to add embellishments or small riffs to otherwise straight forward chords.

What is the best way to accomplish this?

The CAGED system is fine for what it is. I did a tutorial on it here:
http://www.guitartricks.com/tutorial.php?input=383

Personally I find visualizing inversions more useful in many cases. I think it might be a good fit for what you are after:
http://www.guitartricks.com/tutorial.php?input=148

CAGED is simply how all those inversions ultimately fit together and are linked to form an integrated pattern covering the fretboard. But using just the inversions to isolate the three notes you need to form any given major or minor chord is invaluable.

Also, the jazz technique of "Drop 2 Voicing" can really help you integrate bass lines and inversion shapes:
http://www.guitartricks.com/tutorial.php?input=149
http://www.guitartricks.com/tutorial.php?input=268

Finally, in order to make the embellishments and such you need to be able to see all the possible scale degrees all around the chord tones. I did a tutorial with fretboard images that show this here:
http://www.guitartricks.com/tutorial.php?input=462

Hope this helps, let us know how it goes for you!