Hi, all.
I’m a bit late to this, but I decided to add my thoughts.
I would generally have to agree with you on bringing “real life people” into a fictional story. B is right out. For “C,” I might bring a “personality trait” into the mix. But while I’ve seen the trait or behavior in real life, neither you nor even the person themselves will realize that I “copied” the trait, and only that trait, from them. There lies the way to lawsuits.
My “A” is only slightly more expansive than yours. Since I’m using a real-life set of locations, I also need to be very careful with people holding real-life positions. In fact, my disclaimer explicitly disclaims non-historic actions by historic or public figures. I have one celebrity help the main protagonists in one story. That celebrity’s actions were entirely consistent with how he would have behaved in real life under the same circumstances, and were entirely favorable without any potential slight. That celebrity might be joined by one or two more under the exact same circumstances. None of the “celebrities” know anything about the more “interesting” details of the protagonists’ lives.
I’ve also named two different famous local politicians as “background” characters. Their indirectly mentioned conduct is entirely consistent with the “non-criticized” portions of their publicly reported actions and behavior during the time-frames mentioned. In the case of one of the politicians, I invented entirely fictitious additional members of their family who did not exist in real life.
I’ve also replaced scores of real-life people with entirely fictitious counterparts even when the behavior of the “replaced” persons appearing in my story were entirely honest, honorable, skillful, consistent with real-life, and beyond any reproach. It’s just easier to do things that way then it is to try (and almost certainly fail) to describe an “almost famous” person I never met from forty years ago without getting sued. I do “reference” the occasional real life villain here and there. In those cases, their real-life villainy was well-known, as in front-page headlines, and followed up by felony convictions. Any non-historical villainy they get up to is entirely consistent with their real-life behavior at the times and places where it takes place.
That will also hold true for my Harry Potter fanfiction. Since I’m using a real time-frame for the stories, and since I’m using real-life locations, using historical people (gently) is nearly unavoidable, as well as using real-life positions filled with fictional replacements.
The most annoying “reference” I see in HP fanfiction, and I see it all the time, is using the first names of Daniel Radcliffe and Emma Watson as the first names for Hermione Granger’s parents. JKR never even named those two characters, much less had them appear directly; so I get that you have to call them something. But using the names of the actors who play Harry and Hermione in the movies to (not so subtly) claim that Harry and Hermione were only right to date or marry each other is just too heavy-handed for me. Plenty of great fanfiction authors do this in great stories. Plenty of not so great fanfiction authors do this, too. In the case where I had to give the Grangers names, I used the first names of the actors who played them in the movies, and there were actors who played the Granger parents to a sufficient degree that they had to be named and credited. Ian Kelly and Michelle Fairley played the Grangers in Deathly Hallows Part One. Tom Knight and Heather Bleasdale from CoS would also work.
Cheers!