If you don't want to use an emulator, then most likely yes. the reason is that a bootloader can only boot from a restricted list of media types, most of which are physical devices. An ISO image is the only file type, AFAIK, that GRUB can boot from.
You could mount the file on another computer and set up network booting, but that is ridiculously complex for most uses.
Why do you have to boot from a file, why not a partition on your hard disk, or a USB device?
"Insanity: doing the same thing over and over again and expecting different results." (Albert Einstein)