Some emulators (like older versions of Mupen64) can be tricked into loading a file if it has an .iso extension, provided the file is a raw dump. This is not a true conversion, but it works superficially.
Steps:
Success rate: Very low. Most emulators validate the file header and will reject it.
Despite the above, there are a few niche use cases where converting Z64 to a disc image format is technically possible:
You cannot burn a converted ISO to a CD-R and stick it into a real Nintendo 64. The N64 has no optical drive. Anyone selling "N64 CD games" is selling fake or modded PC software.