Can small lung nodules be cancerous?

Yes. Cancers do start out as small lesions/nodules.
Rarely. In people without history of cancer, 5 mm or less in diameter lung nodules have a <1% chance of being malignant. Lung nodules are generally followed on ct scan for 2 years to be sure they do not grow in size. Those that grow can be biopsied by ct guidance, bronchoscopy, or surgery. Check for other causes (exposure to tb, rheumotologic).