Generally, chord melody guitar refers to playing jazz guitar with single line melodies or solos and combining or accompanying with chords. This is opposed to just single line soloing or melody playing, or on the flipside only comping in a band with chords. You actually combine the two at the same time, on one guitar.
Getting into the nitty gritty, the term ‘chord melody’ can actually refer to two similar, but nonetheless distinct styles of jazz guitar playing. On one hand, chord melody can refer to playing in a band setting, e.g a jazz trio of guitar, bass and drums.
In this setting, you need to take care in what chord voicings you apply to the melody and your solos. If you play too many low notes on the 5th and 6th strings it can interfere with the bass player…)