Content Type with People (list of people) in Select List to Choose From
Personally I often use Entity Reference, but I think this answer is the same regardless of the choice between Entity Reference and References modules. Both modules allow you to define a relation between two entities. If you need a reference from a node to another entity, this is a good solution.


  I still would like to know if using People area is best for storing all users / people associated with my Drupal site.


When you say "People area", I think you mean Drupal's built-in user management. Users are fieldable entities, just like nodes. If you need to store data about a person, you can use both the user entity or define a "Person" node type. If the persons you're adding should be able to log in, now or in the future, you definitely want to create users. If they will never need to log in (for instance, you're building a site about people in ancient Rome), I would choose nodes.