It is not that complex. Well, maybe more complex than it needs to be, but still.

You can credit to Aeroplan for flying, spending with a credit card, with purchases from affiliated companies, etc. Your Aeroplan account has a balance, and has status (Silver, Black, Diamond ... or wherever it is) depending on how many miles you earn.

On top of that, miles that you credit to Aeroplan that you earn with with your ... in the seat of a Air Canada or Star Alliance partner flight also get counted towards a second status called Altitude with P25 / E35/50/75 / SE100 levels. When in an airport or on a plane your Aeroplan status is meaningless, Air Canada or Star Alliance partner airlines only care about your Altitude status.

(Technically it is more complex than what I just wrote, but that is irrelevant for most people)

As has been pointed out, the OPs friend is simply looking at the wrong website.