Yes, you can partition one hard disk into multiple partitions having different versions of Mac OS. However, the HD SC Setup will allow only one of the partitions to be a Mac OS partition. This does not mean that Apple doesn't support multiple Macintosh OS partitions on the same hard disk. Third-party utilities allow multiple Macintosh partitions and we have never heard of difficulties with them.
In most cases the typical Macintosh user will equate the terms volume and hard drive. If a hard drive has been partitioned into multiple Macintosh volumes then it is important to distinguish between the terms. Each partition will look like a volume to the operating system. Apple does not recommend putting more than one System Folder on a volume. If one hard drive contains multiple partitions then there is no reason why each partition couldn't have a System Folder on it. This would be no different than having multiple hard drives attached, each with a System Folder on it.
Third-party products can do this. Be aware that many third-party drive software developers are either revising or have already revised their software for System 7.0 compatibility. Be sure you use a version that the developer explicitly states support for System 7.0 and newer.