I'll explain it as simply as possible, and recommend software:
IMG burn is a good software to use for burning ISOs, or creating ISOs from disk images. Its got a very user friendly UI. Its broken down like "Create disk from ISO/image" or Create ISO/image from disk", or "Create ISO from files/folders" etc. There are different extensions for files that are effectively the same as "ISOs" .bin is one of the more common ones. You can handle .bin files the same way as .ISO files 99% of the time. .Bin files are often accompanied by a .cue file, and sometimes you might require the .cue file. There were a couple old emulators I remember that required you mount the .cue file and not the .bin file for it to work properly, but mounting the .bin file usually works.
Windows 10 has a built in way to mount ISO files to a virtual drive (right click ISO then select "mount"), but in Windows 7 I used
Daemon tools Lite to do it. After you mount the ISO to a virtual drive, it should be listed under your devices & drives, and you can open it and run the setup the same way you would with a physical disk. All you do is drag the ISO into daemon tool's window to add it to the list, then select mount.
ISOs with regards to running emulators for console systems, PS1, PS2, etc can be ran directly from within the software.
If you're trying to run a Windows 10 ISO for example, don't try and mount it, just burn it to a disk using IMG burn software.
I create backups of my PC games by burning them to a bluray disk, so I don't have to download them again if I decide to do a fresh install, or build a new PC, etc. Providing they'll fit on a bluray disk of course. I recently made a backup ISO of skyrim, with the recent update + a ton of mods I use with img burn and burned it to a dual layer DVD. Using ISOs as a way to backup data is really smart.
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