Yes it's possible, when speaking metaforically. I wouldn't say it in everyday speech, but in the right context it works, it's certainly something you'll hear in song lyrics.
If you're high on drugs, that's hög in Swedish.
No, the y is short which makes sense because there are two consonants after it. :)
Also it isn't derived directly from fly but from its abstract noun flykt which also has a short vowel and two consonants.