Salt Cloud is powerful on its own, but it can be made even more powerful by tying it in Salt's own event bus. Some cloud providers are able to actively send updates to automated systems, such as Salt, which Salt Cloud can act on, but even if they don't, Salt Cloud is able to poll cloud providers for the information it needs.
There are in fact two caches kept by Salt Cloud, but one is more of an index than anything. Both are kept in the cloud/ directory inside Salt's own cache directory. The normal location for the cloud cache is /var/cache/salt/cloud/.
If you have used Salt Cloud to create a compute instance, then there will be a file in this directory called index.p. This file, which is in the msgpack format, contains a list of all the compute instances that have been created by Salt Cloud (minus any that have been subsequently destroyed by Salt Cloud). There is no configuration variable to turn this on or off; it will be generated automatically...