If a CofE school is oversubscribed, their admissions criteria will prioritise children from the local church and other churches over other local children for at least half of their places.
The younger siblings of the church children are also prioritised, but do not usually count against the ‘church’ quota, therefore further reducing places for non-churchgoing local children.
#NotAllChurchSchools
You can't generalise, you need to look at each school's admissions criteria. I am a governor at a VA C of E school. Our admissions criteria take no account of faith or churchgoing and we have consistently and unanimously (including not only the foundation Govs appointed by the local church and the Diocese, but the vicar too) voted to stay that way.
We don't ask parents to sign up to anything, but it would be also a mistake to consider the school’s ethos "Church-lite" - it is at the heart of what our school is (and with the new SIAMS church school inspection landing shortly, I suspect many C of E schools will be making it more explicit). We ask teachers to be supportive of our ethos. The vicar comes in weekly, there are prayers and hymns every day, grace before lunch, a voluntary prayer group for those who wish to attend and crosses all over the place. Christian values are human values - our parents of all faiths and none accept that. We teach about all religions, we teach the same PSHE course as our local non-church schools, and RE is an academic subject not an article of belief.
Having said all of that - I entirely agree that it is madness that the Church still has so huge a place in state education, and that community schools have to have an act of Christian worship everyday. Definitely bear that in mind before you discount a C of E school in principle - they are all different and you could get a nasty shock.
Ps - we obviously aren't indoctrinating, or if we do so we are incredibly bad at it, because our parish church has a tiny congregation.