Technically yes you can use an 8-way to play 49 way joystick games but you won't like it. Very hard to control Sinistar when trying to collect sinibombs. 8-way sticks just don't have the precision of a 49-way or analog stick as you will quickly find out. Three of my long list of favorites are Sinistar,Foodfight and Roadrunner and to play them correctly you NEED a analog stick to play them so I just hacked a cheap analog flight stick and and used a Wico balltop shaft in place of the trigger stick. works like a champ.
Way to many headaches to try to interface a true 49 way joystick to work with mame so just use an analog stick instead. A 49-way joystick was designed to mimic an analog stick anyway. I never understood why it was ever invented. As far as feel and control I can't tell the difference. And yes, you can use a 49- way or analog stick to play games that call for an 8-way. It might be a bit tricky with 4-way games though. Mame will just recognize it as a regular 8-way / 4-way stick.
Good luck
S.M.