Yes you can use your phone as a hotspot with the goodybag.
There is no limit; there used to be, but not any more.
GiffGaff's 'Always On' data deal gives 9GB of UK data usage per month at the fastest available speed (up to and including LTE/4G), with tethering (attaching another device such as a laptop or tablet) allowed. An amount of 9GB is roughly triple the bandwidth an average person would use over the course of a month, and almost double the 5GB a person categorised as a 'heavy user' might need.
It's important to note that, once the 9GB of data has been used, GiffGaff's Traffic Flow policy will apply for the remainder of the GoodyBag's duration, and members will experience a reduced data speed which could be as low as 384kbps during the day (from 0800hrs to midnight), however, after midnight (until 0759hrs) members will have a data allowance at full speed.
When the Traffic Flow policy is applied to your GoodyBag, you will receive a text informing you of the fact. If you require all data usage to be at full speed at all times, you can opt to purchase a new GoodyBag (or start your next queued one) to replace the existing one.
You can find full details of GiffGaff's 'Always On' data deal at https://community.giffgaff.com/t5/Using-giffgaff/Guide-to-the-20-quot-Always-On-quot-goodybag/ta-p/1