Absolutely. In fact, all three of my novels incorporate fictionalized versions of people and events I either experienced or witnessed in real life, and, I think, to great advantage!
I've lived long enough to learn that truth can often be stranger, more exciting, even more colorful than fiction, and as one who prefers to read that genre over memoir, I love the freedom fiction gives a writer to take real life elements and mold, extrapolate, alter, and develop those in service to the story you've conjured up. You're not beholden to real life facts, there's no one who'll be offended by your fictionalized characterizations (as sometimes happens in memoir!), because you've constructed new versions of the "what and who."
Writing fiction is almost like being a "little god," in that you have the power to fully create worlds, characters, events and plots, and when using real life furthers your story, it's great fun to rework those elements along with the ones you pull straight from your imagination.
