Yes.
The real caveman solution (my specialty) is to attach one wire from the dynamo to the "+" of the headlight and the "-" of the taillight; and attach the other wire to the "-" of the headlight and the "+" of the taillight. That way the alternating current goes to the headlight and taillight alternately, giving each one full power half of the time. No on/off switch, no capacitor, nothing fancy.
It works, I know 'cuz I've done it! But my $80 B&M headlight works so much better, I can't recommend anything else.
If I am understanding your explanation correctly, that would be a full wave rectifier. Adding a capacitor would help smooth out the voltage peaks to reduce the flicker at lower wheel speeds. At higher speeds, the flicker is fast enough to not be noticeable.