You're correct. Travelers cheques are not the same as cash. TCs are safer. If your wallet/purse are lost or stolen and all you have is cash...sayonara. TCs can be reimbursed for full value if you retained your receipt.

Regarding atms, there have been several skimming operations busted on the island that were widely publicized. That being said, I still use them in what I consider "safe" areas (attached to a bank, inside casinos, etc.).