Lure Modules are really awesome and I have used two of them so far.
1. "Shouldn't I wait for higher level before using it? Currently I'm 7."
Use them when ever you feel like it, your level mostly affects the CP of the pokemon lured, but not the specific kind of pokemon you will find. I also have found some pretty rare pokemon due to lures. Meowth, Magnemite, Staryu, Exeggcute, Tauros, Magmar, and Squirtle, are all fairly hard to find pokemon in my town and I have found all of them while hanging out near Lure Moduels.
2. "Does that attract people to my location? XD"
Depends. The secret that I have learned about setting up a solid Lure Module that attracts lots of people is to set them up in areas where multiple Pokestops are located, also ones that are right next to Gyms are often incredibly popular. There's a fountain in my town that has three pokestops right next to each other and it is the single most popular gathering spot for people who want to set up lures. I've set two up there before and I've attracted sometimes up to 20+ people.
3. "Good times for using it?"
Absolutley! Lure Modules have been a blast! The first one I set up attracted a TON of people at the Fountain I mentioned, and once everybody started talking to each other we actually all found out we were all on team Instinct. It was amazing to see so many people all on team Instinct all having a blast catching hard to find pokemon, talking about stupid large CP's and even gathering a group to go around and raid gyms.
The second Lure Module I set up was last night around 2am at the fountain and I got a group of ten people at 2 in the freaking morning! We all got excited when we started to see the silouhette of a Lapras which was in the parking lot across the street from the Lure I had set up. We all went over there, caught and celebrated our incredibly rare catch and then called it a night.
Lure Modules are awesome, try them out if you haven't already, and if you can, keep in mind the location of your lure cause that will often heavily affect how many people will show up to hang out.