Is there any quick way to convert text created at point (automatically resizable boundaries) to a area (paragraph) text (with fixed boundaries) in Illustrator CS3?
Point text and area text are such different objects under the hood that there's no instant way to convert from one to the other. Many typographic functions tied to paragraphs, such as the Single Line and Paragraph Composers, justification, text wrap and hyphenation are inapplicable to point type.
As DA01 says, the simplest way to do this is to select the text, then cut or copy and paste into a new text frame. Select the Text tool and drag out the new frame, then paste. (Your text cursor has to be active inside the frame for this to work.) You'll then have to check for forced line breaks in the point text that will still be present in the new area type.
So to answer your question, no, there isn't an easier way to do this in CS3 (or CS5.1, for that matter).
Adobe Illustrator CC, or newer, can convert between point text and area text by choosing "Convert to Area Type" or "Convert to Point Type" from the Type menu or by using the little type widget -- the small --- box that appears outside of the text frame. Double-click it to convert the text.