The short answer
Cachaça is a Brazilian spirit made from fresh sugarcane juice. It's the foundation of the Caipirinha — and it differs from rum by more than just its name.
Fresh sugarcane juice instead of molasses
Most rums are made from molasses, a byproduct of sugar production. Cachaça is made from freshly pressed sugarcane juice, and you can taste it: fresher, more vegetal. That said, there is also rum made from sugarcane juice. Simply equating the two terms therefore obscures more than it explains.
Then there's the origin. The name cachaça is protected and applies only to sugarcane spirits from Brazil. A similarly produced spirit from another country goes by a different name.
Clear in the glass or shaped by wood
Unaged cachaça tastes fresh, vegetal, and fruity. If it's aged in wood, additional flavors join in. However, you can't tell from the color how long it aged or in what type of wood — that information is on the bottle. And if you're not familiar with strong wood notes, ask for a sample before buying a whole bottle.
The woods are what make it special. Besides oak, native Brazilian species are used: amburana, jequitibá, bálsamo. Amburana lends distinct cinnamon and vanilla notes — a flavor profile found in no other spirit.
Which cachaça for a Caipirinha?
Choose a fresh, clearly described style. Lime and sugar should complement the spirit, not mask it. Measure out the sugar and cachaça — that way you'll get the drink just right next time too.
And when muddling the lime: press only hard enough for the juice and a bit of peel aroma to come out. The white pith releases bitter compounds if you muddle too hard. Short and firm is enough. Working the lime too long won't give you a more intense Caipirinha — just a bitter one.
Not just Caipirinha: the Rabo de Galo
In the Rabo de Galo, cachaça meets vermouth and bitter liqueur. That's a completely different side than the fresh Caipirinha. Try the cachaça neat in a small amount first, so you know what you're working with. And if you swap it into a recipe in place of rum, expect a noticeably different flavor.