Are the characters in “reality” TV shows usually all real people, or are actors frequently used?

They are indeed real people, who interview for the privilege, rather than professional actors. The whole point, after all, is that “real people” are cheaper.

That doesn’t necessarily mean they are media innocents, of course, and I’m quite happy when I find they are not. There are people who have done repeat appearances in various reality shows. There are also bizarre outbursts of outrage in Australia, when participants on The Bachelor or Married At First Sight or The Block turn out to have been strippers or to have acted in ads. I’m actually relieved the latest Bachelorette in Australia was a former news anchor.