Digging around the filesystem a little I see a few interesting things to note:
At the root level I see: "sdcard -> legacy"
Looking here: /sdcard/Android/data/com.google.android.music is only 36 bytes in size.
At root I see: "extSdCard -> sdcard1"
Looking here: /extSdCard/Android/data/com.google.android.music" is 234 MB in size.
Also interesting, the remaining data of the app reported ~700 seems to be in local storage as album artwork, as it's almost all in:
I'm on CM11 Nightly if it's relevant.