Sure. Writing in all caps in a story can be a stylistic choice. It might be used when a character is shouting or when you want to draw special attention to certain words or phrases. Like in a horror story, 'RUN! THE MONSTER IS COMING!' All caps makes it more intense.
Yes, I can. For example, 'ONCE UPON A TIME, THERE WAS A BRAVE KNIGHT. HE LIVED IN A BIG CASTLE. HE WENT ON MANY ADVENTURES.' This gives a sense of emphasis and can be used to create a bold and dramatic effect in the story.
Definitely. It's not uncommon to use all caps in a story for various reasons. In a story about a sports event, 'THE CROWD CHEERED AS THE TEAM SCORED THE WINNING GOAL!' Using all caps here helps to convey the excitement and loudness of the moment. It can also be used for titles within the story, like 'CHAPTER 1: THE BEGINNING OF THE JOURNEY' to make them stand out.