Can I use an old sofa/couch for a DIY project or craft?

Yes! You can make a cover. Reupholster, paint or whatever!

what exact diy project are you thinking

Why not? If you are re-using cushions, you can wash them out with soap and water, but if they don't have a good smell, you may never get that out. If they are falling apart, they will continue to do so and not be very good in the final project unless you can cut out the bad parts, usually around the edges. But old cushions that are falling apart don't suddenly get religion and stay together for the sake of people's projects.

If you are using the springs, have at 'em. They last a long time. The frame could be hardwood, cardboard, plywood or particle board. The zig-zag springs are loads of fun to play with. If the old girl has been stuffed with horsehair, or straw, or other old-timey stuffings, those are probably best tossed out.

The fabric is usually upholstery-grade and while pretty strong, may not make it through a wash cycle. Use upholstery at-home chems chemicals for cleaning or take a chance on the dry cleaner.

You can practice your upholstery skills. You could repurpose to a chaise lounge. You could try dyeing it with Rite Dye. You could make a slipcover.

It depends on the condition it's in and what you want to do with it. You can make new cushions and reupholster other parts of the sofa. If you don't know how to reupholster, this is a good time to learn. You've got a piece that needs help. Look for a local class or go to youtube.com and type in learn to upholster, Start watching videos. Won't you be proud of yourself when it's all done and looking beautiful!

I wish you the best with your project.

Good points raised by Roxaneg about old cushions and fabric not being immortal.