No one is saying that Penelope Cruz isn't European, nor are they saying that she's not Spanish. She has a European passport because that's the continent she lives on and is from. There is no such thing as a "Latin" passport because it isn't a place. A Latina/Latino is a member of any of the Latin peoples, or those speaking chiefly Romance languages, *esp. a native of or émigré from Latin America; a person of Spanish-speaking decent. A Latin person, while in their Latin country would not refer to themselves as a Latina or Latino because it is too broad a term and encompasses many. They would refer to themselves as Spanish, Dominican, Costa Rican, etc.
The term has nothing to do with color of skin either. It does however have to do with language and heritage. Although the term is often and mostly used here in reference to someone of South American decent it is not exclusive to them.

Thanks , I understand that sometimes it is annoying and depressing…
jeje ya sabes todavia hay gente en el mundo que cree que en PR o Mexico no existe un McDonalds y que viven en taparabos, pero aveces ni es culpa de ellos sino q la clases de historia que toman no es la mejor jejejjeej …we always need to clarify things