The number of iterations must be knowable, yes. It doesn't need to be known as a direct constant value, but it must be computable as a symbolic value as some kind (say, an argument to the function, maybe plus or minus a constant).

I haven't looked at the exact criteria in this transformation, but it's very likely that there are also a couple of constraints on how precisely the loop is structured.

Correct, if you don't ensure the necessary preconditions are met you quickly run into undecidable problems.