Check out this screenshot (Heroes 3 + Photoshop).

Personally, I don't think this can be an early version (although...).

I know for sure that this is an early version. All the images in this thread are from the test and unreleased 3DO early versions of Heroes 3. These are not creations of third-party developers or mods – all of this was done by the same artists who worked on the regular Heroes game.

The castles are terrible! And so much in Heroes 3 already looks like toys, and here they completely ruined it. I hope I won't see this in the game...

That's why the developers released what we have now, and not what's in these pictures.

1. Is it possible to redesign the towns to look like the ones in the screenshots?
2. Is it possible that someone will create a version of Heroes like the one in the first screenshot?

No. Only if the WoG team is given access to the Heroes source code. I am part of the team, and as far as I know, this is not planned for the near future.