Classes allow programmers to create new types that model real-world objects. A class defines both data attributes and built-in operations that can operate on that data. C++ provides built-in classes like string and iostream that add powerful functionality to the language. The string class allows easy storage and manipulation of strings, while the iostream classes (istream and ostream) define objects like cin and cout for input/output. These classes provide many useful built-in operations that make input/output powerful yet easy to use.