Should I use Custom Post Types or something else

If I were setting up this custom taxonomy, I would use only two fields: title and content. If it’s there and it fits your needs then it is best to use it IMHO. Title can be used for the name of the person who wrote the testimonial and content would be used for the testimonial itself. You will have to write little to no php to get this to work and your front-end loops will look just like other WordPress loops.