Ok, the answer here is definitely "up". You are right that "take on" and "take up" have similar meanings, however "take on" is not directed toward people. I would say "take up" refers to hobbies and things for fun and "take on" refers to challenges or responsibilities. Here are a couple examples:
When I was 6 years old, I took up the piano.
As I got older, I took on new responsibilities.