I was wondering would it be functionally acceptable to get just a terminal OS for the Raspberry Pi and make my own GUI with java. Would that be a sufficient language for making my own 'desktop' application?
Yes, you could theoretically make your entire desktop environment in Java. Since it's significantly slower than C, it probably won't perform as well, but there is no real reason you couldn't do it.
All it will take is a lot of time, effort, and skill that you may or may not yet have.