Q: Can this theme allow iFrame?
A: Yes.

Q: Since C5 now allows you to use a separate app for mobile, is this still the case? It doesn't make sense you'd want a mobile appearing app to look like this on a big screen.
A: The purpose of this theme is to create an App-like interface so users can mimic an iPhone app just by using a C5 site. What our users usually do is they create a subdomain perhaps and adds a check whether the visitor is using a mobile phone or not if so then the visitor is redirected to the otherwise they will stay in 

This theme relies on jQuery 1.5.1 (included with this package). The newer versions of Concrete5 (5.4.2.x, 5.5.x) uses jQuery 1.6 (and newer). Whilst many of the core features of this theme will work fine on any version of Concrete 5.4.0 OR NEWER, I highly recommend only using it with 5.4.0 to ensure maximum stability. Thanks jQuery!

But the included Mobile Gallery block will only work with 5.4.0, due to nuances in newer versions of jQuery. So it is recommended to use this theme with Concrete 5.4.0 but if you don't need the Mobile Gallery block, then it will work fine with newer versions of Concrete5.