Can a Possessor Demon possess the sorcerer? Isn't the Sorcerer's personality being supplanted on a regular basis if that's the case?

The Possessor rules in the main Sorcerer book are very simplistic and for all intents and purposes replace the host personality with the demon's. In The Sorcerer's Soul this picture is filled in with more nuances.

Can a Posessor use another demon for its host?

If the other demon has a "body," yes (Objects and Passers probably yes; some Inconspicuous yes but others decidedly not; other Possessors, no). However, this is subject to the look & feel for demons in your game. [1]

Possessor Demons utilizing their own Stamina rather than the host's (if the Demon's score exceeds twice the host's score) can damage the host in the same way that a large Stamina Boost may. (See the Boost notes.) (Note that this ability to supercede the host's Stamina with their own is why Possessor's don't have Boost itself.)