Is it posssible for me to use CNAME for different domains like
www.domain2.com CNAME www.domain1.com
Both are server from same server but different Virtual host (root paths are different)
Yes, it is valid for a CNAME to point to an entirely different domain. This is often used in the context of using CNAME records to handle the TLD variants on your domain such as:
mydomain.com CNAME mydomain.net.