The pricing you quote refers to dedicated Memcache (as shared Memcache is free). This provides a fixed cache capacity assigned exclusively to your application. You need to actually reserve this fixed capacity through the developers’ console. This is accomplished by navigating to App Engine → Memcache → Memcache Service Level top left of the frame. To reserve your dedicated Memcache volume, you click on the “Change” link for service level, then choose the desired volume of dedicated cache that your application requires.
Pricing is based on the GB per hour of cache size. Solely the amount of cache memory used gets billed, not the read-write traffic. The MB-level granularity is not specified directly in the documentation, you are right about it. Still, when one tries to reserve dedicated cache by navigating to the Memcache page, as described above, one notices that a value less than 1 GB is not allowed, nor decimals above 1 GB.