I would like to know if it is possible to model
just this residue 700-900 with respect to my template to get it into the
active form.
Sure, just include only the 700-900 sequence in your alignment for the
target (model) and align it with the relevant section of your template.
If yes, should I use the whole protein template or the
region corresponding to the one which I want to model in my target
protein?
Whichever works best for you. You can include the whole template if you
like and just align it with gaps (-) in the target sequence in regions
where you don't want to use it in the model (i.e. residues 1-699,
901-1200). Or read only residues 700-900 from the template and align
just that with your model.
Also after modelling this residues, How could I combine this
back to the rest of the target protein.
If the rest of the protein is disordered, there is little point in
modeling it.