Can I or can't I develop on a jailbreak iPhone?
I've used my former lost jailbroken iPhone to develop, yes. But you'll need more than jailbreaking, though, granted, jailbreak is a must (except in very specific cases):


Actually the only very rare specific exception I know of is the Unity 3D's amazing Remote - but that does (currently) limit phone features that can be tested. No gyroscope for instance.
The regular way is hacking Xcode. Of course the limitation here is deploying: only with USB.
Another way could be something like TestFlight - while I'm not sure this can be done without a proper developer license, I wouldn't be surprised if there's a way to do it Over the Air.