Is there a possible way of taking the coding from a Swap Magic disc and "patching" it to a ISO so it can become self-bootable?

If there was such a way, everyone would have been doing that a long time ago. The best method nowadays is to buy a Memor32 and install/flash it with the Memento hack. The great thing is that the Memor32 is a 100% legal, but the bad thing is that I've only found modchip stores selling them. You can boot it up on a slim PS2 and a fat PS2 as well. The only catch is that you have to patch the PS2 games if you want to play them off disc, but you can still use HDLoader (fat PS2) or run games off a USB Hard Drive (slim PS2 - and slow because it's USB 1.1, but it does work). Of course, you can always go for the Independence Exploit and a quick google search will find you a ton of tutorials to do it, but it only works on a fat ps2.

Check out these 2 reviews:

Memor32: http://www.iso420.org/ps2/memor32/index.htm
Memento: http://www.iso420.org/ps2/momento_v12/index.htm

However, if you mod your PS2, you can play a backup Swap Magic disc. But I don't know if there is any advantage to using it if your PS2 is modded in the first place.

I knew all of what you said, I was just wondering if it could be done, something I was thinking about at school the other day.

I've been using Swap Magic for about 4 months, it's putting up exceptionally well, and my FAT PS2 is broken, it pooped after a year with a HDD in it.