Yes, deleting photos from Finder can definitely cause problems for iPhoto (presuming what you're deleting has been Imported into iPhoto). If you want to delete images you see in iPhoto, do it within iPhoto (Delete Original).
The same is true of iTunes. Deleting music in Finder can create big problems.
You see, both iPhoto and iTunes do not automatically make copies of songs and images when you import - that's a specific setting you'll find in Preferences. You can "Add songs to Library," or "Import" photos from elsewhere on your hard disk without copying or moving the files at all - they just stay where they are, and iTunes/iPhoto knows where to find them. If the songs and images were not copied into iTunes/iPhoto, but are somewhere else on your hard drive? If you delete them from the hard drive, they disappear from iTunes and iPhoto, too.
That's why many people set iTunes/iPhoto to copy the music/image files into the Library. They're all in one place, and they're free to delete other copies of that file that are outside the Library.
To "turn off" Faces, don't use it. If you don't identify the people in your photos, then Faces does nothing at all - it's just another un-used feature.
Faces (and Places) are effectively built-in search results (like searching Google). When you open Faces or Places, it then searches the library for images that have people or place information, and organizes them, the same way iTunes can sort songs by Artist, or Genre.
Faces can be pretty cool. I've scanned hundreds of old family photos, going back to the mid-1800s. When the photos were captioned, I added that identity and location info. But plenty weren't captioned, group photos especially. Faces manages to find Great Uncle Emil in those group photos, in photos were we weren't quite sure of who that was (when he was a child, for example), etc. If I agree, iPhoto then tags the image so it can easily be found the next time you open Faces. It's not foolproof, but it's remarkably helpful.
