Hi fishnoob,
Cheddar cheese is good for all kinds of fish but in my experience its particularly good for bream's/sargi at this time of year with the increasing sea temp. as the cheddar will release alot of its natural oils even if you fish with it @ night

! and you will avoid the unwanted morini/moray eels that you'll 99% get with hniex/king rag worms....not to mention the bustle of boats,swimmers etc you'll have during the day!

Its
very important to buy the proper cheddar cheese and not this pre-packed "vegetarian cheddar" which is in alot of supermarkets,which isn't the same and not very effective. (first of all its a very bright yellow in colour!

cheddar is more pale yellow to off-white)
I haven't seen any spnott/sea bass @ the moment but in my usual spots its full of sawrell of very decent size but they are always running after the small bait fish on the surface and have very little interest in lures (as lapsiboy also confirmed).Ive never caught a spnotta on cheddar but they are well known for snapping up pretty much anything on the surface if it takes their fancy! i once caught a big one with a slice of pizza dough in its stomach!!! and ive heard few other people who also found them with strange things in their stomach so i guess you could always give the cheddar a go!
But personally i agree/go with what you said about hooking a live fish if there is that much surface activity

Good luck & tight lines