Is there any difference between Google guidelines for Android app design and Google guidelines for Material Design? I think my app will not work best with Material Design. I know that Material Design is not just about design but also a lot about UX. Is there any penalty if I don't develop in Material Design?
This page on the developer.android.com website shows that Lollipop now has a marketshare of 5.4% over all Android versions. According to this page, material design will work on Android 5.0 (API 21) or higher only.
That said, it would not be smart to focus on such a small group only. What you can do is check the current API level of the user's phone, and then apply your material design theme, else apply the regular theme.
Android let's you modify a lot of stuff, so you can really give it your own look and feel. With Apple, it's a bit more dictated on what you can and cannot do, but for a good cause: similar experience throughout all the apps on your iDevice (ever heard people say "it just works"? This is one of the reasons).
As you might've guessed, Apple's iOS guidelines are much stricter than Android's. I.e. you cannot refer in any way to Android. Your app will automatically be denied to be put in the App Store.