Linux can be a CD server. Look at
However, many game CDs have security, so using LINUX as a CD server for Windows games will not work. For other CDs it will.
futurist, LINUX already supports setting up ISO images as drives. Everything in LINUX is a directory. When you mount drives, its a directory. Please get out of Windows mode. It will help you learn LINUX easier.
iceman47 already answer your question.