Can I set up partial Time Off days?

Yes! It will need to be selected as an option during the Time Off (PTO) policy set up. 
The admin needs to select "Custom Rules": 

Time Off Rules1

Then scroll down to the last section: 

Time Off Rules2

If you uncheck 'Don't  impose a minimum increment' you can set the minimum amount of hours that can be requested:

Time Off Rules3

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