In Atlas Shrugged, the characters do come across as ideological extremes and not real people, if you go into the book expecting them to be that way. The book has a lot of depth that is missed by people who go into it for the philosophy.
Within philosophy, Rand was least concerned about politics and the economy, and most concerned about man's mind and emotions and man's relationship to reality and to other men. Sure, you can read Atlas as some kind of political treatise, and the characters will come across as flat, because you are missing the point entirely and not picking up on 95% of what's in the book.
In The Fountainhead, the characters don't come across as representing ideological extremes regardless of your approach to the book, IMHO. Anyway I'd recommend The Fountainhead over Atlas for someone new to Rand.
Agreed that Rand is not a libertarian.