Also, does it offer any isolation between apps and between apps and the OS, especially the filesystem?
You can choose for package A to se package B and C, but not D, different versions means simply different packages because you have package alone, let's say the current stable version but also package_major_minor for various supported major or minor version. As well as you can choose to fetch sources from a specific commit from a public repo, build them and link them in the system.
Every package is not "isolated" in the container self, like small userlands on a common kernel, but in the sense of "having different views of the common system", so you avoid wasting gazzilion of storage and ram and CPU plus anything is still from the upstream or yourself, there are no outdated forgotten deps left around.
Plus being anything configured in the config (well, not mandatory, but that's the typical way) you have a fully reproducible system, maybe not binary-reproducible meaning "packageA now is version x.y" when you rebuild the system, but anything could be rebuild in the current state of nixpkgs/guix states from few kb of text, typically versioned in a repo. Every update does not overwrite anything, if put some new versions in a special tree /nix/store o /gnu/store and updates symlinks accordingly, if it does not work you restore the previous state instead/before garbage collection.
Practically it do the same of IllumOS with IPS (the package manager) integrated with zfs (and the bootloader), here instead of zfs clones and snapshots you have a poor man's version with symlinks.
There is no isolation by default, meaning it's a single system, but you can "portion" the system in various ways. Of course on Linux there are no IllumOS zones of FreeBSD jails, the state of paravirtualisation it's very behind those unices.
Ohh yes! That is exactly what it does on a repeatable and documented way..
But it also does a lot of work to do this. And doesn't hide the systems of that so much. So that means you're likely to have yo care about how it does all that work. And if you start doing something weird, might have to do a lot of work yourself..
The second, you can do this by setting certain options in the systemd service for your apps, but this is true for any systemd distro.