Can a auto trans be used? should the trans lines be looped? Dont want to spend $200 on a well used bell housing and $100 on a very used flywheeel.
If so should the trans be filled to capacity?

I don't see why not, just loop cooler inlet to the outlet. Make sure you keep it in park and stuff a slip yolk in the tail shaft.
It would be a lot less headache just picking up the bell housing and flywheel off e-bay or in the for sale section here. Maybe someone local could just loan them to you.

I use a gutted trans and a TQ cut down, nothing moving inside.

No load on the engine but great for checking leaks before installing in the engine bay

Just considering all options here, could you use manual flywheel with a gutted auto trans case?

Yes the cooler lines needs to be looped & I'd fill the trans up. If this is a trans you care about I would consider using a cooler