I get my Internet access through a cable TV connection. The ISP provides an AVM Fritz!Box as the main router and modem. The speed has been somewhat disappointing which I now suspect is down to bufferbloat (500ms latency under load for the 50Mbps connection). I have openwrt based dumb WiFi accesspoints with Cat cable as the backhaul (no routing, just bridging all interfaces with firewall disabled). Enabling CAKE QoS stuff on these doesn't seem to help. Does that only make sense on the WAN interface of a device that is acting as a router? Is there any device available with cable modem functionality supported under OpenWRT? Or would I need to place a separate router between the ISP's Fritz!Box and all of my network? Is paying extra to upgrade to a faster link likely to help at all? ISP's are keen to advertise based on bandwidth but I probably already have plenty of bandwidth, latency is the problem.
You could try looking through the settings on the fritzbox to see if it can do bridge mode. That would allow you to use it as a cable modem only and offload all the router functions to a separate router running openwrt.
The problem with cable internet service is that the cable provider has complete control of what firmware is allowed to run on the modems on their network to prevent service theft. That's why you can't use any cable modems other than the specific models supported by the cable provider.
SQM requires firewall to be enabled (I'm guessing you're enabling CAKE QoS through SQM).
Put your main router's WAN to bridge mode and establish connection to PPPoE server (again, guessing connection is established through PPPoE because it's the most popular way) using your OpenWrt router.
If you want to have internet access on your main router/modem you are going to have to disable DHCP server and assign IP address to an IP address under OpenWrt's subnet. After changing the gateway to OpenWrt's address you should be able to have internet connection on that device too.
This is also a decent rationale why, even if we could, we should not run OpenWrt on a cable modem, we would essentially hand root privileges to the ISP.
The options are either:
a) simply run the OpenWrt router as only client on the cable-router, this is easy to configure, but results in double NAT, which is inconvenient and at the very least means you need to configure any port forwarding rules in both the cable and the OpenWrt router. This also allows to keep a phone connected to the cable router.
b) get a cable-router that can be configured into bridged-modem mode and do so and conbect your OpenWrt router. The pro is that you only have single NAT, the potential con is you need a solution for telephony.