I have a CD with some installer software on it. The software installer points to Disc 2 and Disc 3 and Disc 4, which are folders on the CD. What happens when installing is that the CD ejects and asks for the next floppy to be inserted.
There must be a way of making a mountable disk image... I probably even knew how, back in Classic days.
You can use Apple Disk Copy to create a mountable disk image from a folder. I use Disk Copy 6.1.3. When you use the utility to create the disk image, the files and folders inside the folder will be copied into the root of the disk image. The image will be auto-mounted on the Desktop when the operation has finished, but the virtual disk can be put away until it is required.