Quoting the docs:

• Application: An Elastic Beanstalk application is a logical collection of Elastic Beanstalk components, including environments, versions, and environment configurations. In Elastic Beanstalk an application is conceptually similar to a folder.

• Environment: An environment is a collection of AWS resources running an application version. Each environment runs only one application version at a time, however, you can run the same application version or different application versions in many environments simultaneously.

Back to your question:

Could I use environment to have a development testing and production environment and then have several applications in each environment?

No. Its the other way around. One application can have multiple environments.

For example. If you application is called: my-first-web-application, then you could have three independent environments in it:

• prod - environment stable serving real life requests, running stable version of my-first-web-application code base.
• dev - development environment when you develop and tests new version of your my-first-web-application code base.
• staging - final testing of a new version of your app, before it gets put into production environment.