Can CD's be loud and ok?

The direct answer to your second question is yes, it's possible, but such a recording might not have the best signal to noise ratio. You won't be able to get the slammin' in your face sound of recent pop/rock recordings without the use of advanced compression techniques, but your recording can still be reasonably loud.

The dynamic range of live music is enormous and dosen't easily translate to any recorded medium. Limiting and compression are automated volume regulation techniques used to control the wide dynamic range signal. Using a compressor is the equivalent of turning up the volume when the sound is soft and turning down the volume when the sound is loud. Originally the performance of the compressor was supposed to be imperceptible to a listener, but then came the British Invasion. Several artists used audible, aggressive compression as an integral part of their "sound". The modern use of "hyper" compression is the result of artists emulating the sound of loud radio stations. There's nothing inherently wrong with the use of compression, but like any effect, it's over use can be annoying.

Thanks to everybody for answering.
I'm finding this interesting-is it possible to fully know extents of this technique?
Obviously I state The Jayhawks case which I would guess is extreme with it's distortion.
But do the more perceptive listeners (and I do believe that is a talent)every hear a recording that confuses them?
I'll also be interested to hear comments on particular releases the likes of the last records by Norah Jones,Beck,Radiohead,Peter Gabriel or indeed any record that Audiogoners might use to state for their argument.

Have you listened to any of the Patricia Barber sacd's Ben? Dynamic range, black background and plenty loud in my book, a true SOTA recording that does answer your question.

And proud he should be, now if we could just get him to compress some more of the music for us, he's got the touch!