Are you connected to AD and have you done a profile import? How are you putting in users? What happens when you click the address book button and search for users? If you don't find any, then there are none to add. if you do find them there, then click on them and add them. I wouldn't try to add them manually if you can't get any to work - use the lookup.
If you are creating new SharePoint groups, then there is no welcome email section. If you're adding individual users, then it should have a Send E-Mail section. I'm not sure if that section shows up if you haven't setup Outgoing email in CA. I thought it did and was just disabled, but I can't remember, since I always setup outgoing email as part of my initial configuration.