Yes! Yes! and Yes! This is a perfect way to start taking advantage of OSGi and evolving towards a service based application.
It is trivial to create a framework with the 4.2 launcher API without even knowing which framework implementation you use. You get a Framework object then that is actually an OSGi Bundle and can provide you with a BundleContext. This you can use to install bundles. This all is described in the spec but you can find a lot concrete and excellent examples in Felix: http://felix.apache.org/site/apache-felix-framework-launching-and-embedding.html. Felix has been explicitly promoting embedded in apps since day one.
The hard part of this approach will be getting used to modularity and its restrictions. To be useful, you will have to share classes between OSGi bundles and your application; this requires explicit exporting of these shared packages from your application using the org.osgi.framework.systempackages.extra property. This property is the Export-Package header for your application.
Importing packages from bundles in the framework is not possible due to the class loading model in Java. This means your application code can only use services from the framework where the packages for those services are on the apps classpath.
The result of this is that new functionality tend to drift to bundles where there is full visibility: both the exported app packages as well as any bundles. However, this is probably exactly what you want.
So be aware of this potential pitfall. Embed, and then over time migrate all your code to bundles so that your application becomes only an OSGi launcher. However, be very aware of your the packages shared between the two environments.
Good luck and let us know how this goes.