If reservations are optional, you can reserve a seat if you want. On some routes, especially during holidays like Easter and in the summer, it can be good to make reservations even if reservations are not required. 

I suggest you read the reservation section on this site. On most trains it is your choice to reserve a place or not. You may find you have to stand if you didn’t reserve. Normally the electronic displays are accurate as to whether a seat is reserved or not. The days before and after Easter  can be very busy for train travel. If you post an itinerary experts on this site can give you advice.

Thank you!!  I read the site and cannot find anything specific.  Is my assumption correct?  Buying a ticket and reserving a seat are 2 seperate functions?  E.g. I could end up sitting in coach!  

Your pass is your ticket. A reservation is indeed something else.

Trains from Prague to Vienna largely have optional reservations, so some people will just board without a reservation.

The problem on Vienna-Prague is when there is a CD Railjet, the first class is smaller than on ÖBB Railjet* (1,5 instead of 2,5 carriages).

The ÖBB Railjets to Italy and on slower RJ Vienna-Salzburg they have same layout as CD Railjet.

Thank you both!!  But am I correct in that when I get on the train and sit in a 1st class seat, someone at the next stop could have reserved that exact seat unbeknownst to me?  Also, how can I tell if the seat is reserved? 

There will be small screens on or above the seats indicating from where to where a seat has been reserved, or that the seat is free. Last minute reservations are possible but there are normally only a few seats available for it.

By the way, ÖBB have optional seat reservations in 1st class free of charge, also for pass holders. On tickets.oebb.at, do not use "seat reservation only” but add the Interrail/Eurail discount and then select "One-way tickets and day tickets”. In a second step, you can then add a seat reservation.

Hallo RvdBorgt: so ÖBB has free of charge first class optional reservations? So it’s free within Austria, but also from Austria to Czechia, Austria to Germany, Austria to Hungary, Austria to Switzerland? Also within Germany?

It works not for all trains but quite a lot You have the same procedure as when you reserve a Nighttrain or a Italian Daytrain on ÖBB :) 

Used that feature to reserve a Eurocity Prague - Breclav (for some reason it didnt worked for the Railjets ) , Panoramic Carriage on EC Transalpin Zürich - Leoben + a Eurocity from Vienna to Ostrava.