Check System properties and see if you're in MS-DOS Compatibility Mode. Usually that's the reason why CD drive "disappeared".
Windows normally has its own 32-bit disk driver for handling disks including CD, but if you're in MS-DOS Compatibility Mode it will rely on DOS mode drivers (CD driver and MSCDEX). Normally you shouldn't load any DOS mode CD drivers as that will definitely force MS-DOS Compatibility Mode, but VIDE-CDD is an exception -- it can hand over control of CD to Windows so it will not lead to MS-DOS Comptibility Mode.
If you did not load any TSR that Windows doesn't like and have never modified CONFIG.SYS/AUTOEXEC.BAT, chances are the boot sector is messed up by something (so-called "boot sector virus"). I've seen this happened on my very first PCs a few times, and that was a long time ago.
As for the original question (REM - by Windows Setup), I think Windows Setup would check and automatically add those on lines that are known to likely cause problems with Windows. You should always back up CONFIG.SYS/AUTOEXEC.BAT when installing/reinstalling.
Personally I'm experimenting with leaving base AUTOEXEC.BAT mostly clean and put commands meant for different startup configurations in separate BATs that gets CALLed during AUTOEXEC.BAT. Sadly this does not exempt other BATs from being modified, as Windows Setup appears to statically check every line for potential remarks and will go into any CALLed batch files it encountered and modify lines in those files as well.