The difference between CAS and EAS is not a function of density. It is (as CabinMaster's formula shows) a function of static pressure and Mach number. The delta in the formula is pressure ratio, not density ratio.
Every pilot's text book I have come across refers to the difference between CAS and EAS as "compressibility error". I agree this is a misnomer, it might be better to call it something like "altitude error". The text books have to follow the terminology used in exams, so if we want to change terminology we will first have to convince the ATPL examiners
To quote from Walt Blake in Boeing's Jet transport performance methods.
"This correction, although commonly called the compressibility correction, shouldn't be confused with going from incompressible to compressible flow equations. Recall that the airspeed equation is based on Bernoulli's equation for compressible flow. The correction is more truly a correction for the effect of altitude on displayed airspeed"