Is it a good idea to create mass generals in Empire: Total War before close battles?

The money you will spend on extra generals would be far more effectively spent on a regular cavalry force. Both in the short term and in the long term.

Generals do not have combat stats comparable to regular cavalry. They don't hit as hard, they're more fragile, and if you lose them the loss can demoralize your army faster than the loss of a regular cavalry unit. So while this may be a stop-gap solution to a very particular problem (the problem where you have too much money and not enough time to raise/position an army), you shouldn't do this in common practice.

If you find yourself considering this, you should weigh the alternative of retreating and fighting another day. Sometimes a battle just isn't worth winning.

Generals are of limited value. Their main modifier affects morale and being a mounted unit, they have a charge bonus.

I treat "general" units like mounted units and only use them to support formations and raise morale on a flank that is under pressure. You need to consider who you're coming up against to. If you are coming up against an army with artillery, and you have no mounted units nor artillery, then make a couple of generals. Simply because you run your mounted units into the enemy artillery's flank. Don't forget that if you lose the nobles in your general unit, it will impact your army's morale to.

But if you have the a couple of turns before facing off, you're better off making one general, then recruit extra units as you require. This gives you the ability to round your army for considerably less cost, than the 800 credits to convert each unit into a "General".