Yes - that shouldn’t be a problem, at least when you’re updating with the same Android version (i.e. from one q version to a newer one). Before I flash an update, I always backup the data partition using TWRP (and the boot and system partitions as well if I don’t have a copy of the currently installed version). Then, if there is a problem with the update, I can always wipe everything, re-install the current version and restore my current data. I don’t recall having to do that when doing a normal upgrade, but it makes me feel better 
It’s a different matter when you upgrade your phone to a newer Android version (i.e. q → r). At the moment there isn’t a reliable, easy way to upgrade without losing at least some of your installed apps and data. That’s not a problem with this device though, as I haven’t managed to make an r build that works, since version 0.19-r And no-one has got the Sony Camera app to work reliably on this phone on anything higher than q, so I’ll be sticking with q for a while.
If you ever do get problems flashing, particularly if the device boot loops, (i.e. either stops at the /e/ boot animation, or reboots back to recovery), then the following sequence has always got me out of trouble:
- (in TWRP) Wipe system, cache and Dalvik partitions
- Format data partition
- Flash the new ROM (or the old one if you’re trying to get back a working version)
- Boot the device, and complete First Time Setup app: you can skip setting up WiFi, mobile data, and your /e/ account, but do set any screen locks that were in place when the device was last working and backed up.
- Back to TWRP, and restore the backup from the working device.
- Reboot the system, and check the major functionality works (Calls, texts, mobile data, wifi).
- If any apps keep stopping, try clearing their storage. If that doesn’t work, uninstall and reinstall the app)
With luck, you’ll never need to do any of that but …