1. In principle, both meanings are possible.
Sono stato al supermercato - I've been to the supermarket.
Durante la vacanza sono stato al Regency - I stayed at the Regency during the holiday.
But the more common meaning (the one coming spontaneously to one's mind, or at least mine) is
stato from
essere, not from
stare. Particularly in such a short sentence like the one you asked about, I'd interpret "
Dove sei stato?" as "Where were you?". Consider for instance this example:
Sei andato in vacanza a Parigi? - Sì. - Dove sei stato?
Did you go to Paris on vacation? - Yes. - Where were you? (= what did you visit exactly - I'd never interpret it as "where did you stay?", and it's extremely unlikely the speaker meant the latter).
For "Where did you stay" I'd change verb or add information to make clear what I mean:
Dove hai alloggiato?
Dove hai dormito?
In che albergo sei stato? (Just adding "in che albergo" changes everything)
2. The choice
passato prossimo vs.
imperfetto is a different matter altogether. There are situations in which the former is required, situations in which the latter is required, and situations in which both are possible with slightly different nuances. It's one of the most difficult topics for learners of Italian.

I suggest you search our forum for old threads about this. There are just some of them:
imperfetto - passato prossimo
Imperfetto and Passato Prossimo for Sapere, Credere and Pensare
imperfetto or passato prossimo?
Imperfetto, Passato Prossimo e Trapassato
Imperfetto/passato prossimo/condizionale passato etc
It was - passato prossimo, imperfetto
In the particular case of your sentence, I'd use the
imperfetto. "
Ieri lui ti ha telefonato e non ti ha trovato, dov'eri?"