Ive taken it upon myself to learn music theory, but what i dont understand is since the same note can be played on different strings and different frets, how do i know which one to play? Also how do i know what octave to play in when reading sheet music
Middle C equals A string 3rd fret.

Guitar is an octave below actual pitch notation so if you're reading a piece for something you're going to have to play it an octave higher. Things written for guitar you just play regularly though. *actual middle C is 1st fret B string*
“Science cannot solve the ultimate mystery of nature. And that is because, in the last analysis, we ourselves are part of nature and therefore part of the mystery that we are trying to solve.”

-Max Planck

The octave is notated in the music. If that's not been explained to you, a new guide to sheet music is a necessity.

As far as where to play, that's one of the great annoyances of guitar sheet music. You get to choose where you want to play.
with guitar unless your a vetran, you just have to read through the music and work it out, where you can play it most comfortably and easily, then after you have it all worked out then you can play it, this will come to you more easily the more you do it,
fender strat
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line6 spider 2 150 watt
can of, rock your face off

..................you cant spell crap without rap.......................
yeah i usually play stuff i read at about 5th or 7th frets... but i usually end up moving all around on different parts