yes Spaniard is an old form we now usually say The person is Spanish or a Spanish person. The term Spaniard to some has a negative connotation.

I agree that it is a least less common than the alternatives, and maybe it is a bit old-fashioned. At least in the US, it would be much more common to say “he is from Spain” or “she is Spanish.”

Yes, it is quite old-fashioned. In fact, most of the demonyms which are exclusively nouns are rather old-fashioned - Englishman, Scotsman, Frenchman, Dutchman and so on. And to a lesser extent, Turk, Swede, Finn, and Dane. These slightly outdated terms also have the disadvantage that they tend to refer only to men. When I hear the word 'Spaniard', this conjures up an rather old-fashioned image of a Spanish man - not a woman. There are many nationalities ending in 'n' (Brazilian, Korean, Italian etc) which are both adjectives and nouns. With these nationalities, it's common to use boths forms : two Canadians or two Canadian tourists, for example. The same goes for nationalities ending in 'i' ( Iraqi, for example) But for nationalities which don't end in 'n' or 'i', it's always preferable to use an adjective to refer to a person's nationality - a Spanish person, a French woman, a Dutch student and so on. And, of course, there are other nationalities which only have adjectival forms (Japanese, for example). I hope that helps.

It's relatively common in New Zealand - but in a different context: https://en.wikipedia.org/wiki/Aciphylla_colensoi