Can PHP instantiate an object from the name of the class as a string?

Yes it is:

<?php

$type = 'cc';
$obj = new $type; // outputs "hi!"

class cc {
    function __construct() {
        echo 'hi!';
    }
}

?>

if your class need arguments you should do this:

class Foo 
{
   public function __construct($bar)
   {
      echo $bar; 
   }
}

$name = 'Foo';
$args = 'bar';
$ref = new ReflectionClass($name);
$obj = $ref->newInstanceArgs(array($args));

Yep, definitely.

$className = 'MyClass';
$object = new $className;