Music theory is a good thing to know. I'm a self-taught guitarist, and it became easier for me to play music once I learned about scales and chord composition. All in all, I don't think there are any set rules for making music though. Just do your best and make what you like. I know it's not very helpful advice, but I found that's mostly what I do when I make music (playing a physical instrument as well as making electronic music). There are, however, some things that I've noticed over time. Maybe you'll find those more helpful! But please excuse my wording.

1. Boss battles tend to be more epic than the rest of the entire soundtrack. They usually have strings and horns, but of course not all of them do. An electric guitar with distortion is good too. Make boss battles the coolest music on the soundtrack. It makes the player feel like he or she is part of an epic event, which makes sense because the game's levels typically build up to boss battles. Sometimes boss music is sad (piano...), and that's usually because the battle is a sad part of the story.
2. People like to use flutes for forest music. If you have sound effects with birds chirping or insects making noise, those are sometimes good to include. Forest themes tend to be more atmospheric (strings). They're sometimes, but not always, slow. You can make it upbeat if you like.
3. Town music...can vary. If you have themed towns, looking at the actual artwork and imagining a theme might work. For example, if your town is in a desert, you might use this scale. I recommend listening to other game music, thinking about how they figured out their themes, and considering how you wish to compose your own. As an example, here is music from Pokemon cities.

If you have a darker and edgier art style in a cyberpunk world, it might make sense to use acid techno and electronic music in that setting. Also, the minor scale is usually used for sadder music, the major for happier music (you probably know that already though). If you have a happier, cartoony game with bright colors and such, it might be better to make a more bubbly, upbeat, happy hardcore soundtrack. Those are just suggestions anyway.

Nobuo Uematsu (video games) said he always thinks about the emotion in the scene when he starts working on a song. Alan Menken (film and musical theater) similarly said he focuses on how his music can bring out emotions and drive the story in ways that the non-musical elements of the production can't, making the production something that it couldn't be without the music. Both said they focus on a unique style for each project. Both have that piano-songwriter style similar to Elton John.

My personal advice would be:

(1) Focus primarily on a vision—that includes the emotions you want your music to convey, the dramatic purpose, the overall (music) style for the project, and so on. Once you have a vision, everything else will begin to fall into place; without a vision, you're moving without any direction. The more detailed your vision, the better.

(2) “Never add anything meaningless to your game.” A principle I learned recently from my mate Tomonobu Itagaki. This includes never adding anything meaningless to your music, and never adding any meaningless music to your game. If any tune in your music, or even an entire song, does not provide anything meaningful to the game, cut it out nice, clean, and without remorse (and presumably with a katana to keep the Itagaki spirit of the principle ).

(3) Always always always keep learning. The greatest artists (including composers) constantly seek to challenge their limits in new ways on every project they work on, and then put everything into it. Use your experiences and comfort zone as the basis, but never as the limit of what you're capable of. Never composed a calypso pop song? No problem. Alan Menken never composed a calypso pop song before he composed Under the Sea. He knew what he wanted, and then put everything into studying that style and composing the song that would win him his first Academy Award for Best Original Song. Had he not dared to learn a completely new (to him) style of music, Under the Sea would have never happened.

Music, and sound in general, should be one of the last things you put into a game, which it sounds like you're at this stage. This is because you need to have established how the game will look, feel and play before adding in the music. At least, this is how it works with larger teams but if you're a one-man shop then there's nothing preventing you from trying out music now to see if it fits.

For now I'd grab a bunch of reference tracks and try them inside your game

Nobuo Uematsu (video games) said he always thinks about the emotion in the scene when he starts working on a song.

Edit: so to clarify the point I was making earlier, full audio production should be later in the dev cycle.

As for the point about budget. What I mean is, say I have a $100,000 budget for a game. I can scale the game so small that it allows for bringing in the audio guy early, and making all kinds of changes throughout conception and development; or I can scale the game so large that I can't afford asking the audio guy to redo anything. Similarly, I can pay for exclusive rights on the songs, or I can pass on exclusive rights to afford more flexibility and bring you in earlier. Those decisions are up to the director and the producer (can be the same person), which is why I said it depends mostly on them. A director who values the input you can give early on will want to bring you in early on; one who doesn't will scale differently.

It's funny how you mentioned him because that's what my research was about. Though, I don't recall coming across that quote. That's also a good place to start

I'm surely paraphrasing that from memory, but I'm sure he said it. :P Can't find that particular quote in his dozens of interviews right now, but I did find these:

“My role is to create interesting music that moves people emotionally.” (source)

“My task is to make sure that I am able to express the emotions I want to, and not just brushing up on my skills.” (source)

So, he clearly defines his role as expressing and driving emotions.