1. It might work if your application is not using any WM 5.0 features or APIs. In other case it's guaranteed to fail on 2003.
2. You could develop for older platform, not for newer one. In that case your application would run on a newer platform because it's backward compatible with the older platform. However since SP2003 is quite special that might not be enough and you probably would need a separate version of your application for it.