So it would appear that visual ambiance in music games can be pretty important.  Take most rhythm games...

Background colors change, flashes appear, etc, all in time to the music in games like Guitar Hero and Rockband.  In PaRappa, characters dance and jerk their bodies in time.  What you end up getting is more music video like.

Rhythm games, those games where you have to tap your fingers, feet, or guitar to the beat as part of gameplay can feel more music video like because you end up "playing" the music to some effect.

Reactive games on the other hand, may have to rely on visual ambiance more.  Reactive games, are more often than not, played like any normal game.  The environment in the game may react to music, but you don't.  So if you're not required to react to the music, the music can start to take a back seat to the game play, and it starts feeling less choreographed.

This is why visual ambiance can become more important, and probably should be in your face more in a reactive game.  It would seem that when you don't control the choreography of the game, other musical visuals need to step up to help out and make the game FEEL musical.

I used the example before of AudioSurf (published by Valve).  I crticized it for not tying the visual to the music as well as it could have.  I can't criticize it for attempting ambiance to tie the music into the game better, because it does an adequate job of this with colors and background visuals.  However, the environmental reactions to the beats still seem too out of touch with the music, and the ambiance is all it has going for it to make it feel choreographed.

So, the closer you can tie in your reactive environmentals the better.  But like I said, even that might not be enough, as your game starts focusing on the goals of the game - which is why visual ambiance becomes a VERY important silent partner.