"Moreover, there’s no way to listen to purchased audio files on an iPhone unless it’s bought from the iTunes Store."

That has never been the case.

You can import any audio file in your iCloud folder into Garage Band ON YOUR PHONE and export it as a ringtone, which will show up in your list of ringtones. Takes about 2 minutes the first time. 30 seconds after that.

It used to be more complicated but certainly not impossible. I've been making my own ringtones for my iPhone for over a decade.