There's a few reasons to blockade an enemy- a lot of them aren't obvious, but do make a significant difference, particularly in longer wars.
-The most immediately-obvious is that blockades make it a lot easier to take enemy forts that are blockaded. Certain factors such as Naval Ideas can make this faster, or let you Naval Barrage (basically artillery barrage but via ship) for free, which is useful if you're fighting an enemy that has a lot of coastal forts.
-Blockades also give you a bit of warscore, and will passively generate money..
-Blockading your enemy's home ports will give them war exhaustion and reduce their global trade power.
-Blockaded provinces will have a harder time building troops and ships, as well as getting devastation and reducing trade power. If your enemy has a lot of coastal provinces, you can significantly slow down their ability to reinforce with fresh troops.
-As long as members of the enemy force don't control both sides of a strait, a ship presence in the middle will keep them from moving; this will usually cause a blockade, though it doesn't need one.
-Certain Casus Belli will give you ticking warscore for blockading, mostly the various Trade Conflict CBs, notable mostly because they don't let you affect control of land.
These features often aren't decisive, but are useful in a number of circumstances.
-Being able to break enemy coastal forts easily is a good way to restrict enemy movements and fleet access, and the faster any siege is, the less men you'll lose to attrition.
-War score and war exhaustion both end a war quicker. Always good to have.
-Holding straits can be very useful- you can snipe provinces across straits with marines to get some cheeky warscore, and if you can split up an army as it tries to cross a strait (such as using it to break up the procession of Hormuz' allies) or to prevent an enemy force from escaping across a strait, you can make a very significant difference in a war.
-The biggest use is probably if you're fighting an enemy that's got a lot of influence over an important trade node to you. A strong blockade can shift the balance of an embargo in your favour, or just remove trade power they need to smother you- and if you're getting both more trade income and the blockade income, it can reduce the financial burdens of a war significantly.
-While superficially useless, there's actually a lot of situations where a Trade Conflict CB is exactly what you need to make progress. For example, if you're still in the early game and you've consolidated an island nation such as the UK, Ireland, Madagascar, Japan, the Philippines, or you're one of the various minor island nations, then a trade conflict war- which is one of the few CBs that can give you ticking warscore without ever facing your opponent in battle- will let you harm your enemies and build up your nation in preparation for wars of conquest. Try them out once you've got naval superiority against Ming, Kilwa and whatnot; the Bank of Ming is famous for a reason.
-Additionally, there's a lot of times where you just need to sit back and chill, and Trade Conflict CBs are fantastic for doing this. You can rely on forts and attrition to do the majority of damage, letting you save on manpower for the important wars; you can get enough warscore to break enemies' alliances; and you can manipulate truce timers, either white-peacing enemy allies or looting them for all they're worth while you wait out their aggressive expansion timers.
-The blockade CBs mostly stop being useful for chilling once you have multiple areas of warfare, and you've built up enough manpower or invested enough in mercenaries to be near-constantly at war. However, there are times you can still want to declare them for the easy Transfer Trade Power- for example, if there's a powerful nation in the South of India and you've got colonies in the Malaccas that can't reach Zanzibar, Aden or Hormuz, then a Transfer Trade Power is a CB you can get at range (via sending light ships to protect trade) and use to force trade through to your collection nodes, all the while weakening your enemy for the conquest war when you get close enough for a direct CB.
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