Making my own isolation transformer
Yes, assuming the wire is insulated from itself and adequate creepage and insulation thickness and breakdown rating (for your purposes) is provided between primary and secondary windings. With 20 turns it will only be useful for low voltage AC. 
No, it will smoke and/or blow the breaker. 
Wind enough turns to reduce the magnetizing current to a reasonable value. That will likely be at least as many as were there originally on the primary for whatever your mains voltage is. The magnetizing current is proportional to the reciprocal of the square of the number of turns.