Does the immigration officer know about our travel plans?

Does the immigration officer have a copy of my cover letter or
detailed itinerary mentioning my travel route which I had submitted
along with my Schengen visa application?

They do not, but they are entitled to ask for the same and you should be ready to produce these documents when asked.

The golden rule is, carry a copy of each document you used in support of your visa application; you never know which document may be asked for; and just so it is clear – they are well within their rights to ask to see supporting documents.

Source: Personal experience.

The materials you referred to like your travel itinerary are in a database that is maintained by a different organisation and the border guards do not have access to it from the primary control point (i.e., at the airport where you present your passport). They use a different database that displays whether or not there is a stop flag on your passport. Schengen border guards really do not need anything else, but overall this has to do with the way Schengen is organized.

They inspect the visa to assure it is genuine and examine any limitations on its face. So if you have a variation in your plans but it’s not detectable, then you will not get caught (all other things being equal).

On the other hand a substantial variation will come into play if you need to make another Schengen application. That’s because Schengen consular officials have access to more databases than the border guards.

Does the immigration officer have a copy of my cover letter or
detailed itinerary mentioning my travel route which I had submitted
along with my Schengen visa application?

If by ‘immigration officer’ you mean the person at the airport who scans and stamps your passport, then the answer is no.

As always, Schengen border guards are entitled to see your reservations and travel arrangements, but the things you present are not ‘linked’ back to your application. Finally, it is ‘best practices’ advice to bring your evidence with you any time you will be examined.

The border guy sitting in a booth with a long line of grumpy travelers leading up to him? Almost certainly not, and if he had access, he wouldn’t have time to read it while you’re there. After all, the very point of requiring a visa is that your documentation can then be understood and judged without the here-and-now time pressure of a border crossing and a line that has to move.

If you’re taken aside for supplementary questioning instead of being let in immediately? Still probably not, in most of the Schengen countries, especially if you’re entering through the external border of a different member state than the one that handled your application.

However, that doesn’t mean that you can just lie about your basis for getting the visa. Even if they have no way to verify the application immediately and you’re let in at first, if they get suspicious enough to start grilling you about what was in your application, they might just take a note of your claims and check them afterwards, and if you’re found to have lied to border guards you can look forward to an entry ban — or (in principle) even to a flag on your passport number and criminal consequences when you try to leave.

You’re not required to follow the itinerary you submitted with your visa application in every littlest detail. You are required to answer truthfully when the border guards asks you what your current, actual plans are. If you’re asked specifically about the application (which is probably rare, but it could happen), answer truthfully about that and explain any changes of plans you’ve made since then.

If your plans have changed so much that you should have applied to a different consulate if you were to make a fresh application based on your current plans, it might be a good idea to volunteer information about what happened, especially if the border guards seem to be confused by where your visa was issued.

Oh, and as Nate Eldredge mentioned in a comment, don’t depend on border guards being able to pull information in your favor from a magic visa computer if you haven’t brought the documentation you need with you yourself.