Does this always imply people or could this be, "there isn't anything?"
"There isn't anything" would be "아무것도 없어요." The 것 in this sentence would refer to things rather than people.
Why can't they accept "There's no one" ?
"There's no one." is now accepted.
can it also mean 'there is nothing?'
"No one is here" is also an acceptable and frequently intended translation.
are you supposed to use double negatives like this or would "there isn't anybody" be an acceptable translation?
That would be an acceptable translation
How about There isn't anyone?
there is no one should also be correct - in fact, it's MORE correct
This sentence does not make sense to me :-(
Q: "Anybody home?" ("누구 집에?") " A: "There is no one." ( 아무도