No. What happens is, you *patch the ISO*, then you put it on the PSP, and then... you play! Easy as pie! It's like patching ROMs -- wait, it IS patching ROMs! It wouldn't be a *patch* if you couldn't *apply* it somehow! Temp patches via built-in emulator features does NOT count, and actually fails quite easily, as it would if you tried to run Mother 3 in English without *applying* the patch, just leaving it on the side for the emulator to use. It makes NO sense!
Ys VI/F/O also kinda required a GamePad. To get the most out of the gameplay, at least. Unless, perhaps, you use both the keyboard and the mouse combined in some really weird, unnatural way. But, yeah, Ys 7 most definitely wouldn't be suited for playing on a keyboard. I mean, it's possible, but, ew...
By the way, if Ys VII actually gets released on the PS3 as well, I certainly wouldn't be able to hold back, and I certainly would end up paying my bro many visits. xD
By the way, to be fair, I heard there are some things one can do better when playing YsVI/F/O using a mouse, but I'd've to research the matter a little better to say more. (Bugs and exploitables to be more precise.)