I decided to update my JDK to Java 8, and installed to the default location of C:\\Program Files\\Java\\jdk1.8.0 with a jre subdirectory.
I
Try to delete all .iml files and .idea, and re-import the project from Gradle. Worked for me (provided you have everything else set up).
This error happens when you switch from Intellij to Android Studio, or the other way around, and load the same project. Looks like their project model is not compatible.