GC support was a planned feature for Wii Backup Manager, but it seems that project got abandoned.
Gamecube ISO Tool however is made by the same guy as a testbed and shows what GC support might have been like in Wii Backup Manager, it's not as user friendly as WBM but it works fine, it's the tool I used.
You have the choice of GcReEx or DiscEx format, I think GcReEx makes the smallest image as it extracts all the files, whereas DiscEx keeps the ISO file, but shrinks it. The difference is probably not huge, but GcReEx is the one I personally used. GcReEx should have faster load times as well, since the files are right there on the HDD so it takes fewer steps to access them. I don't think the compatibility is 100% for these formats, so if you find a game that doesn't work when shrunk, try the non-shrunk ISO.