It is OK to use paper towels to clean windows.
Paper towels work pretty good for cleaning windows although some brands of paper towels may have lint but most times it's not an issue.
If lint is an issue for your windows then using a microfiber cloth rag to clean the windows with would be a better option.
You could also use shop towels or even the old cloth diapers that you would fold and pin on a baby as they are lint free as well.
Yes you can clean your car windows and even your windshield using paper towels.
Regular paper towels will work fine to clean your car windows and windshield although shop paper towels or shop towels are better.
But I've had no issue cleaning my cars windows and my cars windshield using paper towels.
I spray some Windex onto the window and windshield and then use the paper towel in a circle motion to clean the cars windows and windshield.
I've never had any issues or streaks etc with regular paper towels.
Also the old style cloth diapers work well as a cleaning rag for windows including house windows, car windows, windshields etc.
They are lint free and work well as cleaning rags.