They are really for different purposes.
The ISO is the entire physical disc. It is 100% of the data contained on the physical disc. Technically can be used to recreate the disc by writing to a blank disc (minus any DRM). It's just that a backup in case you lose the disc. Long term archival, not much more to do with it. Though technically if you love discs but want to go discless you can mount the ISOs in windows and treat it just like you inserted the physical disc even playing menus etc. Not sure what point of that is as take up more space and backup data should be put in cold storage and re copied every 3-5 years (if using a magnetic HDD).
MKV is just a container taking the sections of the TV Series or Movie you select and creating playable files you can watch or stream, edit etc.
Question: Is defragging a HDD that used exclusively for movie and music back a good or bad thing? While it may help the drive find a file faster-and thereby put less physical wear on moving parts-does it help to protect data or put it at risk?
And when is it better to use SDDs rather than HDDs?