Ephesians 5:18-20 exhorts us to be filled with or under the control of the Holy Spirit. These fillings result in our singing of psalms, hymns, spiritual songs, and making melody. The psalms are full of exhortations to use musical instruments in praise. To me it would be strange to be told to sing about making music on instruments while we sing but then be told to not actually use instruments while we sing.
We are constantly indwelt by the Holy Spirit. He does not come in once when we ask Him into our life and then constantly come and go, arriving and leaving again. No, when He responds to our invitation to come into our heart and life, He comes to stay. So, we do not have to coax His presence down from Heaven.
At times as we worship, or meditate, or read His Word we may become more aware of His presence but that is our attitude. He hasn't left for a while and then returned. When we sing or praise God we are inviting Him into our situation or making room for Him in our situation.
In 2 Kings chapter 3, King Jehoshaphat wanted to hear from the Lord so they sent for Elisha who had been the servant of Elijah. (Actually Elisha had "poured water" on the hands of Elijah. This pouring was an Old Testament form of baptism or ritual cleansing). Elisha requested that a minstrel be brought in and while the minstrel played, "the hand of the Lord came upon him (Elisha) and he spoke prophetically." In this case the music helped him concentrate and set the mood.
In
1 Chronicles 25:1 it speaks about King David appointing people to the service of the Lord who prophesied with harps and other instrument.
Music/praise/worship has been used to set the mood, or prepare our hearts, or get us to the place where we can submit to and flow in the Spirit.
The verse you are thinking of is probably
Psalm 22:3 which says, "But thou art holy, O thou that inhabitest the praise of Israel." Many of us just sorta misquote this as "God inhabits the praise of His people."
"Did you know that God has an address? Have you wondered where God lives or dwells?
Psalm 22:3 tells us that He is enthroned of Israel." Jim Goll
"When we praise God as a body, God Himself comes into our midst. We set up a throne in our midst and God Himself comes down to occupy that place of honor and authority." Terry Law
"Praise brings God into our situation but worship lifts us up to God's realm." Larry Huch