Sole by-the-book CD/DVD image with a corresponding specific boot loader (e. g. isolinux) with installation environment which expects to access its files on a real optical drive through regular bundled ODD drivers would be almost completely useless today. To make such disks — installation media for systems released before widespread support of USB boot — work without real CD/DVD-ROM, you need to emulate BIOS functions and/or compatible device, and also keep the whole image at hand, most likely by copying it to memory in full, to provide data for reading, then boot the installer into that partially virtualized environment. Even older systems (before standardization of CD booting) may additionally need boot floppy emulation.
The main reason you can easily copy installation images to USB sticks and other devices is that they are actually “hybrid” images with a bag of tricks helping them to also work like a disk drive, and boot that way. There are two boot loaders which handle different modes (and a third one in UEFI boot partition, though accessing it is firmware's problem), and the kernel knows that it can be started in various ways, and has to look for the root filesystem in multiple places. Ventoy and company make use of the fact that everything is ready, and the only thing left for them to do is adding the menu item with proper path and kernel boot options.
So you can run Linux from USB stick, you can run it from there, but use intermediate boot loader (say, Plop chain-loaded by main system to bypass slow USB access in old BIOS through its drivers, and massively decrease boot times), you can run it from extra partition added to your disk, you can run it from image file, you can run it from memory, and so on. ISO is just a convenient legacy distribution format that does not help with any of that. And, as mentioned, there is no “boot process” with UEFI, you simply copy a bunch of files to the USB flash drive, firmware sees that one of them looks like a boot loader, then it is started, and can do anything it wants.
The main reason you can easily copy installation images to USB sticks and other devices is that they are actually “hybrid” images with a bag of tricks helping them to also work like a disk drive, and boot that way. There are two boot loaders which handle different modes (and a third one in UEFI boot partition, though accessing it is firmware's problem), and the kernel knows that it can be started in various ways, and has to look for the root filesystem in multiple places. Ventoy and company make use of the fact that everything is ready, and the only thing left for them to do is adding the menu item with proper path and kernel boot options.
So you can run Linux from USB stick, you can run it from there, but use intermediate boot loader (say, Plop chain-loaded by main system to bypass slow USB access in old BIOS through its drivers, and massively decrease boot times), you can run it from extra partition added to your disk, you can run it from image file, you can run it from memory, and so on. ISO is just a convenient legacy distribution format that does not help with any of that. And, as mentioned, there is no “boot process” with UEFI, you simply copy a bunch of files to the USB flash drive, firmware sees that one of them looks like a boot loader, then it is started, and can do anything it wants.