Quantum light-matter interfaces (QLMIs) connecting stationary qubits to photons will enable optical networks for quantum communications, precise global time keeping, photon switching, and studies of fundamental physics. Rare-earth-ion (REI) doped crystals are state-of-the-art materials for optical quantum memories and quantum transducers between optical photons, microwave photons and spin waves. Here we demonstrate coupling of an ensemble of neodymium REIs to photonic nano-cavities fabricated in the yttrium orthosilicate host crystal. Cavity quantum electrodynamics effects including Purcell enhancement (F=42) and dipole-induced transparency are observed on the highly coherent 4I9/2-4F3/2 optical transition. Fluctuations in the cavity transmission due to statistical fine structure of the atomic density are measured, indicating operation at the quantum level. Coherent optical control of cavity-coupled REIs is performed via photon echoes. Long optical coherence times (T2~100 microseconds) and small inhomogeneous broadening are measured for the cavity-coupled REIs, thus demonstrating their potential for on-chip scalable QLMIs.