Can I suggest you clarify your question a bit further? Are you asking about using plywood for the exterior walls, as exterior wall sheathing, or instead of drywall for the interior partitions? Or both?
For the exterior walls, you certainly can use plywood. It needs to comply with the ICC regulations (I assume you live in the US); chapter 23 of ICC deals with wood elements in detail, how they need to be pressure treated, humidity levels, drying, etc. It also deals with minimum member thickness and exposure durability classification if they will be exposed or used as sheathing elements.
For interior walls, you need to determine if walls must be fire rated. The keyword in your question is loft: will there be doors inside the flat? If so, fire rating comes in place. If it's a true loft with NO doors, there's no fire rating to be considered, and you can use any material. But you'll probably build a bathroom, and you'll want a door there, which means you need to make sure the material for the bathroom partitions meet fire codes.