If you don't want some of your media files to be listed in Play Music (and possibly other) app then you need to have a way of creating simple text files in your directories. I use File Manager. Notice the period before "nomedia" in the next step.
First you have to create and empty .nomedia file in the directory where those files are located. Repeat for other folders in necessary. Folders within the target folder don't have to have this .nomedia. It is only needed in the parent folder. This is called recursiveness.
On my Galaxy Nexus device: I tap "running app" soft button then tap and hold on Play Music.
Tap "Clear cache" to clear the "library".
Close Play Music. Swipe across on running app list or whatever method you use.
The last thing to do is reopen the Play Music app and select "refresh music" from the menu.
Clearing the cache will not erase your playlist (at least on Android 4.2).
Wait and enjoy.
Wait and enjoy.
