sure, I use similar practices. After 20 years you can basically see what you're after on the neck without thinking too much about scales and whatnot. Poke around in the lessons area at EG and you'll run into some of this stuff http://guitarsoc.homestead.com

And yeah, you can play guitar in your mind without having one in your hands. You can visualize intervals, chords, lead lines, riffs, whatever -- and visualization techniques are a great way to improve on guitar.
http://shredlikehell.com