This has to be answered in two parts:
1) Yes, it can. Just set the output resolution to 720p, and the internal resolution to whatever high number you computer could afford.
2) Can it make non-widescreen games widescreen? No. PCSX2 doesn't have the widescreen hack (I'd want it as well). So even in 720p, you'll be playing with a 4:3 ratio unless your game supports 16:9 natively.