On a recent question that was closed as a duplicate (correctly) one of the comments was to use a foil blanket as a ground sheet instead of a tarpaulin in a bid to reduce the overall pack weight. Is this an effective strategy? I have images of the foil tearing after being lain on and stretched.
Yes, you can use an emergency blanket as a substitute for most of a tarp's uses, but as you suspect it's not going to be as durable.
The Mylar that they're made of is surprisingly tough and I doubt that it would rip or tear, but I would expect it to develop plenty of very small punctures and begin to lose its aluminum coating (possibly making a glittery mess) within a few uses. It would be worth picking a brand and testing them out before committing to it.
Personally I like to carry a contractor's trash bag. I hammock and use the trash bag to store my pack and boots to keep them dry while I sleep or as a pack-liner. The bag can be cut open into a large makeshift tarp or poncho, they're tough. They also begin to get small perforations and tears after a number of uses, but I'd suspect they'd be stronger than Mylar–although they're also heavier.
You can in a pinch, but not what it is made for. Won't last very long at all and will make a ton of noise. Get a piece of Tyvek and cut it to size. Cheap, light and durable. Can't beat it.