Glad it was useful, and thanks for the kind words.
Where the option lives. Summon the Adventure Assistant with ".aa", open Settings, and look for the three lines starting with "Dungeon scaling": standard, original levels, and none at all. Pick one and you are done.
Your understanding is right, with one distinction worth having. The three settings are not a single slider, they are two independent things.
Standard scales creature levels to you and adjusts for how many bodies walk in.
Original levels stops touching levels but keeps the body-count adjustment. This is what everyone will start with after the next patch.
None at all turns the whole thing off. The instance is exactly as it shipped: native levels, native stats for the full intended group, native experience.
So yes: with none at all, a five-man wants five people at the right level, and a twenty-five-man raid wants twenty-five. Taking fifteen into a twenty-five heroic would be rough, and bosses with enrage timers or mechanics needing bodies in several places may simply not be doable. That is the point of the setting, but go in expecting it.
One thing in the other direction: the body-count adjustment does almost nothing once you are at the intended size. Five in a five-man is already the designed difficulty. Its whole effect is at the short-handed end.
Formations. Type it in party or raid chat and every companion of yours obeys, or whisper one to talk to it alone. "formation circle", "formation arrow", and so on. The full set is arrow, circle, line, shield, queue, melee, near, far, and chaos, which is the default.
You can have a look at
https://www.reddit.com/r/wowservers/comments/1vfmjsj/some_tips_when_using_playerbots_for_parties/ for other tips.
The companions left outside. Two different things are happening, and only one of them is a problem.
The first is a hard limit you cannot argue with: an instance holds a fixed number of bodies, five for a dungeon, ten or twenty-five for a raid, and companions count toward it. A raid group of twenty-six for a twenty-five-man will always leave one outside, and no command changes that. Worth checking your group size against the instance size before assuming anything is broken.
For the rest - the ones who genuinely fail to follow you through - the fix is the "summon" command. Type it in party or raid chat and they come to you, wherever they are, through a portal as easily as across a room. I hit this myself often enough to reach for it by reflex; you should not have to kick and replace anyone.
There is now a Summon party entry in the Adventure Assistant that does the same thing for the whole group in one click. It existed in the menu but was wired to nothing until two days ago, so if you tried it before and nothing happened, that was why. The command is the one with mileage on it, so use that first.
Same menu has Resurrect party for the fallen, at full health with no resurrection sickness. One limit I cannot remove, and you will meet it eventually: you cannot talk to the Assistant while you are dead, so after a full wipe nobody can reach it. Someone has to still be standing.
On finding other humans. There is a realm-wide World channel, and it is exactly what you are asking for: it is human-only, by construction. Companions are kept out of it entirely - they are never enrolled in it, they cannot post to it, and they cannot even read it. So every voice you see there is a person.
It is also cross-faction, so Alliance and Horde read the same line, and you are enrolled automatically when you log in. Type ".chat your message" to talk in it, or use the normal channel syntax since it sits in your channel list as World. ".chat off" and ".chat on" mute and restore it if you ever want quiet.
For the simpler question of whether anyone is on at all, the site's front page carries a live count that separates real players from companions, so you can check before logging in rather than guessing from the crowd in Dalaran.