Technically yes, in practice no.
Most auroras occur between 90 and 130 km above ground level, though some occur hundreds of kilometers high. Source
NASA considers Low Earth Orbit to be between 160 km and 1000 km above ground, so you have sufficient overlap to be safe in that respect.
An aurora is the emission of photons by gas particles in the atmosphere. In order to be considered an aurora there is the obvious requirement that it be visible from the ground. This translates to the requirement that many gas particles emit photons at the same time over a large area of the sky.
The exact mechanisms that make auroras possible are still under investigation.
A general idea is that the sun is constantly emitting charged particles (mostly electrons) in all directions, and many of these get trapped above the Earth's atmosphere in what's called the magnetosphere.
Image taken from NASA's tumblr page on magnetospheres
The size of the magnetosphere depends on the relative strengths of the solar wind and the Earth's magnetic fields.
When the solar winds rapidly increase in strength it contracts and you can observe the consequence of an onslaught of charged particles being flung into the Earth's atmosphere.
This is typically observable at the poles where the magnetic fields are the strongest and attract the charged particles most strongly.
Because of this, auroras are massive.
See a beautiful animated version of this image here
As you can now imagine, the sheer scale of the event is absolutely massive and caused by forces that no spaceship will even need.
So, yes, an ion drive which emits plasma will cause the atmospheric particles surrounding the thruster to gain energy and release it in the form of photons and cause a light display much in the same way that the particles trapped in the magnetosphere do.
However there would not be any sustained excitation of the atmosphere, and so instead of generating an aurora that covers the sky, the space-ship would leave a quickly fading, much smaller trail of lights reminiscent of the lights of an aurora.