Yes, it's possible, if you have a Shengen Visa you can travel to any country in the Shengen zone (large part of Europe).
Amsterdam is my home town, so I want to supply some practical information here.
You can see a map of Schiphol here: https://www.schiphol.nl/nl/plattegronden
and if you wish to see Amsterdam then your best option is to go by train. Train tickets can be baught online (prices are 1 € cheaper then in real life, go to: https://www.ns.nl/en). Alternatively, you can buy them at yellow machines which are in the lobby room of Schiphol.
Trains (without transit) from Schiphol to Amsterdam usually depart from track 1 or 2. In 15 minutes you'll arive at your destination.
Amsterdam Central is located at a favorable place. When leaving Amsterdam Central just walk straight on and you'll enter the centre of the city.
See a map of Amsterdam Central:
If you want to return to Schiphol from Amsterdam Central, then go to track 11a or 14b. The 'a' means that the train is at the middle of the track, the 'b' means that the train is at left most or right most side (yes thats I know it's strange).
My advice: train delays may occur, so plan your sightseeing tour with train delays in mind, and don't miss your flight!
About the baggage. Usually, you can claim your baggage at your last stop (Luxembourg).