For Members or Non-members, when entering a person for the first time in the People > New Contact, the toggle choice for Contact is a Member is irrelevant to the Relationships entries you make at the bottom of that page. At the bottom right of the page is a big, blue + (plus) button. That button opens up the Relationships selections.

When editing the relationships of a contact already in People, click the Edit this Contact icon at upper right when inside their contact, in order to see the Relationships section.