I'll go with region, but without a strong reason. I want to say that a region is defined by the characteristics that its component parts have in common, whereas an area is just any demarcated expanse of ground. For instance, one would say, "The civil war in Syria risks destabilizing the entire region" to refer to those surrounding countries with shared interests. "The Spanish language in the New World is marked by distinct regional differences" points only to those countries in the area (the New World) who share Spanish as a language. These are subtle nuances I'm trying to bring out. It is true that they are often interchangeable.

Either one can be used. If you look up the definition you will see that both words use the other word in their own definition.

There was a similar question posted a few years ago: http://www.italki.com/question/35469