Say i fill up all four slots, will that give me more storage area? i used to play a new person in other games because each villager would get a chance at fossils and a bell rock, and items from trees. Will that still work?
I really can't imagine how anyone can play the game for any amount of time without using all four available characters at least once in a while.
It should become obvious as soon as you start that the extra storage space is a must. The special visitors are the next major reason--using all four characters helps things move along much faster. Many holidays work better with extra characters. There are a few other minor reasons (for example, extra manikins for museum displays), but I've covered the major three.
To address your specific concerns, extra villagers aren't going to help with fossils, but they do help with the magic rock (which is a bit more important in this game). Trees--sometime yes, sometimes no.
Yes, for the most part other characters are like playing the game completely separate (sans the town) so you get your own storage in closet/QR/letters. You even get all the tutorials again lol I mainly use it for storage and so I can design more houses. They also each get their own money rock per day and can do stuff like work in the cafe, get mannequins, etc so you can get multiple items like the gold watering can if you want to (since its one per person).
That said, I think fossils and trees might just be per town, not person. Fossils probably for sure, but I never really tried shaking trees on other characters. On Easter each person gets the special rock/ground eggs (they will respawn) though.