Cavity quantum electrodynamics (QED) studies the interaction of atoms with the electromagnetic mode of an optical cavity. When there are multiple atoms (N) inside the cavity mode, collective effects emerge. As a result, the atom-cavity system shows vacuum Rabi splitting (VRS), which depends on √N. This makes the cavity a frequency-sensitive detection tool for measuring state-dependent interactions. This thesis explores advancement in cavity QED with cold atoms, aiming to address challenges in non-destructive detection with multi-level atoms/molecules. In this talk, we will look at the experimental challenges of traditional fluorescence methods with complex systems due to open transitions and multi-level structures. Then, we demonstrate the cavity-based detection scheme to examine the molecular formation process and monitor population dynamics. We explicitly validate the effectiveness of the scheme by comparing photoassociation rates in a bright and dark magneto-optical trap. Subsequently, we extend the technique to multi-level atomic systems to mimic molecular transitions, highlighting the method's ability to study population dynamics in real time and examine the factors affecting the detection. Finally, we theoretically investigate how this method can be used for direct state detection of ultracold molecules