with square space, you get the domain + web space + you get access to their unique control panel (shopping cart) and website builder.
GoDaddy you are just getting the domain, and then you still have to pay for web space through a web provider (HostGator or through GoDaddy as examples) and then you are free to use whatever website/blog creator you want.
SquareSpace and Wix, etc are popular because their website creator is very easy to use. They do hide simple things behind a paywall though. Example, I use wix for all 3 of my websites, which is starting to add up monthly wise, and if I want my own custom email then only way I can do that is paying $5 a month for a business gmail account (yourname@yourwebsite.com).
Where as if you bought the name on GoDaddy.com and bought webhosting from HostGator you could probably make 10000 free custom emails, but at the cost of not being able to use Wix or SquareSpace website creator.