What are named entity advantages over strings?
The comparison between named entity and string is irrelevant, because the concept of named entity doesn't belong to data types such as string or numeric values. Of course a named entity is usually represented as a string but so is a text document, a cryptographic key or a translation of a text to Vietnamese: what matters here is the semantics, not the technical representation. 

The reason why named entities (NEs) are often offered special treatment is because they are particularly relevant for certain tasks and are notoriously difficult to detect and analyze:


The task of Named Entity Recognition (NER) consists in detecting named entities in a raw text document. It's not a trivial task, the problem is still an active area of research.
Even after having been identified, named entities are often difficult to disambiguate. The same entity may appear under many different variants for various reasons:


"John Smith", "J. Smith" and "John A. Smith" may or may not be the same person.
"The president" and "Donald Trump" may or may not be the same entity.
"Big Apple" and "New York" represent the same entity, but not "big apple" and "New York".
...



Of course when one is provided with the result of the NE recognition/disambiguation process, they can process NEs like any other piece of information... but that's because all the hard work about NEs has been done before.