Neither very magical nor quite real.
I have had a lot of issues with this book as I read on, but possibly the biggest problem is that I can't be bothered to address them all.
With a great big cast of characters, is it inevitable that they would be all rather flat? I might say yes, but surely that needn't apply to the two main characters (couldn't figure out which of them was protagonist and which an-, so letting it stand at that)? I didn't get to know any of the people Rushdie talks about: he keeps enumerating their actions and sometimes even states the reasons, but you never feel that you've penetrated their inner motives. On the other hand, we get rather too much of the author personality, author comments, and author showings-off: "look how I can go! There, wasn't that great?"
The language was okay - some neat phrases, only a few cringeworthy paragraphs, but not a great style to hold up as an example.
As to any deeper sense, religious or otherwise, nothing could be said there also. I got the impression that at every possible point things were left intentionally vague, so that the reader could choose just about any interpretation they liked and go on singing praises to the author's subtlety in not highlighting that interpretation. Of course, a good book shouldn't give us all the answers, but I'd prefer it at least to conjure up some questions in the reader mind. Other than "What the hell?", that is.