Does Linux support multi-user?

Yes, right now that might be the simplest way to achieve the kind of separation you are looking for for multiple users. It's totally do-able, the infrastructure is there, it's even fashionable.

Now I will point out that running multiple OS kernels in a VM environment isn't the goal, hardware memory managers support strong separation but it's just currently easier to separate jobs into different OS kernels than build and configure the same level of separation within one OS kernel. Sooner or later we will get per-process checkpointing and live migration as well as containers and namespaces such that you will have a single system image across a cluster of machines which will have better scheduling and visibility of resources.