Yep. In English, "it" usually has very specifically non-person connotations. Using "it" to refer to other species of animal isn't a big deal*, but you can't really use the word when directly referencing humans. This is the reason that people jump to using the plural "they"; it's a word that can reference human or non-human, so even though it's in some ways structurally less fitting, it feels more correct and polite.

The English language is pretty funky; it's sketchy but efficient, with some things very loose and some things locked down hard. The pronoun system is very much natively matched to a society using binary gender terminology, and that's something that our society is currently trying to figure out. Languages do tend to change as their use needs change.
Adoption of non-gendered pronouns to gendered may be what ultimately happens, though the question of "it" and "they" is very interesting. Structurally, English would maybe be better off if we found a good general-purpose non-gendered singular term for people. But "it" might never be in a position to migrate to that usage. I do have to wonder if "they" is actually too ambiguous, considering the usage differences. Things are changing fast enough that we will get to watch a lot of this play out over our lifetimes.

[/meanderingness]

*Maybe your cat disagrees. But it probably disagrees with everything, so whatever.