Small-scale position tracking of individual persons/objects has been one of the big challenges of research across many universities and companies in the last few years -- I'm fascinated by it too but people still haven't arrived at a very consistent/universal/feasible solution.
In your particular case, you could try using a couple of IR cameras (especially if you pull out the Wiimote's camera, since it's well-documented) -- Place an infrared LED on each individual and you'll be able to track them in 3-dimensions. Still has the problem of requiring line-of-sight but at least it will be precise and inexpensive this way.