Looking back over the last four decades of my study of music and the guitar, I can see the mixture of academics and art.
On the academic side, I had to learn technique, how to play chords, how to play melodies, how to see the chords nested inside of scales, how to understand how notes "outside" of the scale worked, and a truck load of other rules and principles of music. There is a vast mountain of knowledge appropriately called "Music Theory" which you can study for years and years and years.
On the artistic side, I had to develop the ability to recognize when the music coming out of my hands was MUSIC, not some exercise of purely mental origins. There is a magic and mystery in the creation of music. You can play around with a scale or mode or melody for years, and suddenly a micro-tweak of the timing of certain notes or voicings pops that sound into the world of ART vs. ACADEMIC. Honing your hearing to recognize those moments of ARTISTIC CREATION is the most important thing you can do as a musician.
In my experience, I found the following to be true. When I am focused on the OUTPUT of my playing (e.g. play this lick over that chord, play a certain chord in a certain song a certain way, etc.), I tend to be living in the ANALYTICAL side of music. However, when I am focused on LISTENING and EXPERIENCING the music coming out of me - when I turn off my mind and allow my heart and ears to drive the car - then I tend to be living in the ARTISTIC side of music, and that is where the magic happens.
If you study music history, you will find an evolution of sound which runs converse to the devolution of languages. While languages tend to SIMPLIFY over the millennium (e.g. ancient Greeks had over 400 forms of the verb, "Stop"), music has trended in the opposite direction with more complex harmonic structures being introduced over the centuries, greater tension, greater intensity, and greater communication. The amount of music theory a serious student of music has to master today is a vastly larger body of information than that which his predecessor had to master a thousand years ago.
NOTE: A significant amount of popular music of the last few decades may be an anomaly to this trend, as much of it has been simplified by the corporate drive to turn music into a BUSINESS vs. an ART FORM. The discovery that great sums of money can be made from music driven solely by profit has opened Pandora's music box which has resulted in lowering the world's standards of music appreciation.
Not all musicians are created equal. In fact, everyone of them is unique and different and has a individual voice to add to the world of music. Some outstanding musicians know very little music theory, some musicians who know vast amounts of theory end up creating very little great music, while others may embody vast knowledge AND creativity. There is no formula.
The acquisition of the knowledge of music theory is not detrimental to the creation of ART, as long as the carrier of that theory does not allow the theory to become his master and dictator of right and wrong. We must always remember that it is called MUSIC THEORY, not MUSIC FACT - it has NEVER BEEN PROVEN!
We must allow ourselves to get outside the box and experiment with harmonies that are "wrong" according to music theory, but "right" according to our ears. Our ears are the ultimate litmus test of right and wrong when it comes to music - not the academic rules set down in the universities and schools of music.
A pristine example of this is the bridge section of Stevie Wonder's song, Living For The City....
(click on the score below to see a larger image)
While Stevie Wonder obviously knew a great amount of music theory, this work of genius was not the result of analytical thinking driven by the brain. It obviously had it roots in the artistic realm of the ears. Yes, he had to KNOW how to make half-dininished chords and how to change meter. Yes, it can be dissected and analyzed, but no comparable work of music will result from that. Mr. Wonder obviously went outside the box of music theory and into the realm of wonder to find this melody and harmonize the descending bass line (G, F, E, Eb, Db, Cb, Bb, Ab, G) and unmistakable melody. I can assure you that no music theory formula will generate the chord progression used in this piece of music.
So while music theory is valuable - extremely valuable - don't allow it to become your North Star in your journey thru the realm of music. Dare to deviate from the well worn paths and experiment with ideas that are "wrong" according to theory. You may well find some hidden treasures out there beyond the walls of the fortress of music theory.