The problems of speed observation and position feedback stabilization of mechanical systems are addressed in this paper. Our interest is centered on systems that can be rendered linear in the velocities via a (partial) change of coordinates. It is shown that the class is fully characterized by the solvability of a set of partial differential equations (PDEs) and strictly contains the class studied in the existing literature on linearization for speed observation or control. A reduced order globally exponentially stable observer, constructed using the immersion and invariance methodology, is proposed. The design requires the solution of another set of PDEs, which are shown to be solvable in several practical examples. It is also proven that the full order observer with dynamic scaling recently proposed by Karagiannis and Astolfi obviates the need to solve the latter PDEs. Finally, it is shown that the observer can be used in conjunction with an asymptotically stabilizing full state-feedback interconnection and damping assignment passivity-based controller preserving asymptotic stability.