THE TEMPTATION TO USE REAL LIVING PEOPLE in prose is generally a bad idea. Although an SF writer might like the thought of using someone like Arnold Schwartzenegger as a character (or he might create an Arnold clone because the reader will have an instant understanding of the clone's physical characteristics), when writers use real, currently living people in their prose, they are not thinking of the editorial risks involved. Few publishers are willing to chance a lawsuit, no matter how small the mention of the real person, how innocent the motivations of the writer, or how small a press they represent. Possible slander is a threat most publishers will choose to avoid. Casting famous persons already dead is far less of a problem, although there could still be an issue if their heirs take objection.
A similar reasoning also holds true for using other people's quotes in your prose or other musicians' lyrics in your work. Unless you have received express and written permission from other writers, publishers, or musicians that you may include excerpts of their work within your own, most publishers will not make the effort to seek copyright on your behalf. If you must use a particular quote or lyric, you will need to provide proof of permission to your publisher. In Canada, most creative works become part of the public domain after fifty years following publication, although there are exceptions. This link, provided by the Ryerson University and Archives, offers a good explanation of copyright.
Generally, stories that include real living people as characters (or make mention of them, like our current Prime Minister), or include famous quotes or lyrics without receiving permission, end up in our rejection pile.