Is there a way - setting to say that a user will only manage users (view, create and update users) from setup and nothing else? For example, i don't want this user to have access to object manager from setup.
It's not currently possible. A user needs to have View Setup & Configuration in order to see the User Detail page and related User settings (e.g. User List Views). This permission will also allow users to see the Object Manager, although they would need additional permissions to create/update/delete/truncate fields and objects.