Teenagers are the most typical killar och tjejer, so yes, sort of. But those words are used very broadly, some people will speak about their newborn kille or tjej, and some old people will think of themselves as kille/tjej too (others may snigger, but still). Also, since they can mean boyfriend/girlfriend, they are sometimes the best word you can think of for your 80 year old neighbor's new sweetheart… so in practice, killar och tjejer can be any age, but the best example of them are teenagers or people in their 20s.
Then it is like in Spanish "chico" and "chica" (boy and girl). It's mainly for young people but you can hear a woman is her 40 or 50 or more talking about her "chico" (boyfriend). At least in Madrid. It sounds a bit weird in Barcelona, though. :) Or a newparent saying his/her newborn is a chico or chica.
I think the best literal translation is 'lads and lasses'- in a lot of British folk songs, these terms are used when referring to young men and women (usually in folk songs relating to cheeky ploughboys and busty farmers' daughters...). These terms have changed meaning in common usage since then of course ('lad' often referring to guys who do brash things with alcohol, for example), but the 'old-style' meaning of 'lads and lasses' seems to capture the spirit of 'killar och tjejer' without any infantilising of women!
I noticed that in one sentence that Tjej is translated as girlfriend, Min tjej bor i Sverige, and it will not accept My girl lives in Sweden as correct. However when I use girlfriend here, it then tells me that I am wrong, and will not accept girlfriend as correct, though as mentioned here, it refuses to accept girl.
I am so confused, so this word as different meanings in different sentences, and they are not interchangeable. How do you know what word to use?
kille/tjej can mean either boy/girl or boyfriend/girlfriend. The former is more common but the latter is also perfectly fine - context will normally derive quite clearly which is which. Hence, this sentence is highly unlikely to be interpreted as meaning "boyfriends and girlfriends" unless in very explicit context - and for min tjej bor i Sverige, nobody would ever think you meant anything but "girlfriend".