"proprietary" typically means 'owned and controlled by some-one else' .. and (as you suggest) often 'bespoke' = reworked / adjusted %26amp; 'customised' to your specific requirements ...
Some proprietary packages are written from the ground up to suit your needs .. most will simply be 'reworks' of the vendors existing package.
The main real advantage is that you can ask for some specific function or capability that is not available to other users and thus gain a competitive advantage over other users (the more mass market package will be aiming to address 80% or the requirements of 80% of the market .. if you need one of the 20% requirements (or are in the 20% of the market not covered) you may have no other choice but to go the proprietary route).
Disadvantages are legion .. starting with the fact that the fewer the users (and your 'special function' may have only one user) the fewer the people finding and reporting bugs and thus a (very) slow rate of bug fixing .. and despite the fact that proprietary software is more 'specific' to your needs, it can often have (much) less 'general' functionality that a mass market 'general purpose' package ...
You will typically discover that you must pay for annual license and maintenance contracts (despite the fact that you may get no bug fixing during any given year) and that should you stop paying the software become unusable .. needless to say, if the vendor decides to drop that package (or goes out of business) you are left without support (or working software) within a year
Finally, compared to 'off the shelf' mass market packages, the cost is always horrendous (and once you start using it you often find you are 'tied in' as it stores your data in proprietary formats (sometimes encrypted) without any means to extract the data in a form suitable for importing into any other package ..
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