Can Ethanol be used to carry out SN1 reaction?
Be careful!  Ethanol is not a strong acid ($\mathrm{p}K_\mathrm{a} \approx 16$). So its conversion to ethoxide anion is not so easy. Rather, it would attack the $\ce{C}$ center by its lone pair and then it would release proton to form the product.

Actually here what I think is, the hetero atom $\ce{O}$ just near to the $\ce{C}$ undergoing substitution will assist by its lone pair to kick out chloride and then being planar ethanol can attack from either side. And finally, you get the product of $\mathrm{S_N1}$ type.

But don't mess up between ethanol and ethoxide ion. They are totally different in nucleophilicity. Treat them as two different nucleophiles.