No, it's not using json/jsonb/hstore (to store the true JSON data). It uses a bit of jsonb but for a side part of the information.

And this is the true power of it, that data is stored in normal, relational tables. Please see a comment above explaining this in more detail :)

Does all data have to be stored relationally or can you pick and choose?

Reason I ask is for example something like a game session blob from a multiplayer game, I might not want that to be merged with the relational data and just throw it away after a certain amount of time/days/weeks so they are nice as blobs but other data would be better relational.

Yes there are app/cache level ways around this but might be cool if there was a way to choose auto relational or blobby. I guess ultimately you could just have multiple stores for live and archival data but something to think about.

Data is laid out transparently to the user. Indeed, there should be no (visible) difference as to how it is stored. Data within a single "level" is stored on a single table. If you want to keep blobs, you can definitely do that, they will be stored as such (bytea in postgres).