position control mode of industrial servo motor
1) You can, since the 555 has an open-collector output.

2) As long as the pulse width is wide enough (~5 usec for single-ended inputs driven by open-collector NPN) pulse width is completely irrelevant.

3) One step will produce a 1-bit change in the encoder output. Since you're using a 20-bit encoder, one step will produce an angle change of 360 / (2 ^ 20), or about .00034 degrees.