Apple added emulator support a couple of years ago. Delta works great.

I’ve seen and used terminal applications from the App Store that seem to run a Linux VM locally, which would check off items 2 and 4.

Retro game emulators were allowed only 2y ago and bold retro. JIT is still not allowed so they are restricted in being run in interpreted mode. Also, neither is allowed executing arbitrary arm64 binaries. And, of course, no hypervisor access. The Linux-using term (iSH) works by utilizing a x86 emulator / compatibility layer (basically translates x86 binaries and maps Linux calls to native ones). In the sole VM host available, UTM SE, the "SE" means "slow edition". Now jailbreak and you've full, JIT-capable, UTM (QEMU) and NewTerm (kinda Termux for iOS). Hypervisor access still not possible though.