Plan is for each “level” or map to be a sector of outer space, no terrain or landscapes. Combat is space ship to space ship.
Yes! Mostly any game type can be made with Lumberyard. Remember Lumberyard is a distant “relative” to Cryengine, because they started with Cryengine and made it their own. So short anwser is any idea can be made, some will take more time than others.
Yes, Lumberyard could be used to make any type of game. The big question when selecting an engine is what they make easy for you, and what you would have to implement yourself.
A space combat game is essentially an FPS game, with no gravity and no “ground”. The distinguishing feature is that you tend to be dealing with larger spaces, a sort of large open world in all directions. So, things like level streaming and origin rebasing of co-ordinates might come into play. You might get into some tricky coding, as I’m not sure how well Lumberyard deals with those out of the box.