Can an iPhone be effectively and easily used to store and play music from library via bluetooth speakers?

Yes. I do it all the time; just pair the speakers with your iPhone following the manufacturer’s instructions. To start, you need to store the music on your phone. Here’s how to sync music from iTunes (or the Music app on recent Macs) to your iPhone→Sync your iPhone, iPad, or iPod touch using your computer using USB - Apple Support. The sync is one way, computer to iPhone. If you have music from other sources, such as ripped CDs or MP3s you first import them into iTunes/Music on your computer, then sync to your iPhone.

Other options include a paid monthly subscription to Apple Music, or to iTunes Match, which uploads your music library to iCloud (for an annual fee).

If you have other music sources, such as Amazon music, you can also install an app specifically for that music. SiriusXM also has an app if you subscribe, and for classical music the idagio app has a 2 million album library. You can stream from it or also download for offline listening (although it can be overwhelming making choices with that many options).