do fretless guitar have notes too?

Well of course they do. The only difference is that on a fretless guitar (or bass) you will place your finger where the fret is located on a fretted instrument. As Michael says in his excellent answer, you can also have far more micro-notes on a guitar without frets. One downside is that you really need to play accurate to have the correct pitch/notes (be "in tune").

As have been said already, you can compare a fretless guitar or bass with any other fretless instrument, like violin, viola, cello, upright bass etc.

On a fretted instrument, the string vibrates between the fret (or nut) and the bridge saddle. This distance determines the pitch. On a fretless instrument, the string vibrates between your finger (or nut) and the bridge saddle. Same thing, this distance will determine the pitch. And of course (goes without saying), the pitch always also depends on how high or low the string is tuned to begin with :-)

You produce notes with a fretless guitar the same way that you produce notes on an oud or a violin.

Press the string at exactly the right place.

On any stringed instrument, the note produced is determined by the length of the vibrating string. That is the length of the string that vibrates.

If you hold a string to the fingerboard on a fretless instrument, that is the distance from your fingertip to the bridge. If you move your finger a little, the length with change (a little) and the note will change (a little).

On a fretted instrument, the length is determined by the distance between the fret below your finger to the bridge. If you move your finger a little, the string is still pressed against the fret and the vibrating length of the string isn't changed so moving your finger a little doesn't change the note being played.

Yes, fretless guitars have notes.

"Notes" are just the names that we give to different frequencies. Since a fretless has more possible frequencies, you can play more notes on a fretless than you can on a fretted instrument. You cannot play quarter-tones on a fretted instrument, but you can on a fretless.

It would be kind f hard to play a song if they didn't play notes wouldn't it.