Is air density calculated using Total Pressure (Dynamic and Ambient) or just Ambient?

Just the ambient pressure. The dynamic part is used separately in other contexts.

I am a private pilot. During the flight sometimes the ATC (air traffic control) issues information and weather advisories like: Altimeter 2990. winds 160 at 25. we set the altimeter at that pressure. The altimeter reads the ambient pressure.

The dynamic stagnation pressure is registered in the pitot tube as the plane's speed.

For your calculations in a wind tunnel, the density refers to the properties of the fluid at rest.

if you are at sea level and standard condition of pressure (1Atm) and temperature (23C) that can be approximated as 1.225$frac{kg}{m^3}$.

If you need to be very precise you can adjust the density based on the local atmospheric pressure and temperature.

$$rho=frac{pcdot T_0}{p_0cdot T} rho_0$$

where:

• $rho$: density
• $rho_0$: density at sea level standard temperature/pressure conditions
• $p$: atmospheric pressure
• $p_0$: standard atmospheric pressure (1 Atm)
• $T$: Temperature
• $T_0$: Temperature (23C)

If you don't have a barometer and a thermometer (unlikely) and you are not at sea level, what you can use, is an approximation based on height from sea level

The rest of the calculations take into account that property in order to calculate all remaining quantities. (Even the dynamic pressure you are using you can see it uses the density. If you had to calculate for diffenent density for dynamic pressure then you'd need to recalculate afterwards for the new dynamic pressure and ... again.)