I will leave it to the others to contemplate what goes for shrinking dummy data, extraneous padding and wasted space, or indeed what goes for compression at iso level as I am not so familiar with the current state of things (and never actually was -- miniDVDs might be relatively expensive but not like you were going to do sensible multidisc things a la the original xbox, though for the Wii where full discs are a thing in GC mode then different circumstances)
"removing all unnecessary data and leaving only the game data intact"
For what it is worth that is not something automated tools (this side of quite strong AI or serious crowdsourcing* anyway) can do and is subjective as well.
Classically there was a concept called ROM ripping (yes it gets very confusing) wherein you remove files not used by the game -- something the developers left in and forgot to comment out/remove/left in as a bonus.
The subjective part comes in in that there might be things you don't care about (oh no not online multiplayer, whatever will I do without it? Or perhaps what tragic luck the game I played the whole thing of crashed at the credits as I deleted them), or if you are sharply limited on space then levels 1 through 4 and 5 through 8 are in separate ROMs you delete to swap between as the game progresses and you keep space on your SD card or whatever.
Anyway if you deal in the original xbox scene you will see this extensively, I used to do it for the DS (
https://gbatemp.net/threads/gbatemp...ew-2016-edition-out.73394/page-2#post-1799596 ), some kind of went there for the Switch but that was more about replacing files, similar happened at times for the Wii, the PSP saw a fair bit (but could also run compressed isos from the memory card -- see PSP CISO/CSO) the PC saw quite extensive takes on this around the time of bit torrent's rise (and you have options here to do things like replace audio with far smaller versions and convert back out at either runtime or during installation -- your 50 meg per track wave files are now usefully measured in kilobytes AAC audio or something. Some emulators for PS1 and flash carts for the megaCD also do this with CD audio replacement/substitution but that is getting off topic). Again with the GC being mostly based around mod chips and miniDVD it never really became a thing compared to the xbox (where dual layer DVDs were a thing and cost an absolute fortune/most xbox stock hard drives had a few gigs of space).
You can go further and drop video quality if you have an encoder (not sure what dropped with the gigaleaks or has been made in the time since, and space savings here are potentially huge, could go one further and make a single frame of black screen and call that the video), texture quality/detail (rare but seen it done), audio quality (mentioned elsewhere some of the emulator level stuff, also quite rare as a concept).
There is also relinking; say you found a 40 meg video file (possibly even from another game) but there are 15 videos in the game, you could copy-paste over all the larger ones but you still get hammered on space, relinking sees everything look not to its individual file but the single 40 meg file and you can wipe the rest of the space (works better if you have iso level compression but you could rejig everything to make a smaller file, though it will likely be a manual effort). Video by the time of the gamecube will also be a significant component of size -- during the 8 and 16 bit era a game's script might be a significant component of the ROM but given I have 3000 page ebooks for a few megabytes then that is a lesser thing when even seconds of video might measure multiple times that.
You can take this to quite extreme levels and alter the game's code to handle lack of files, call other files, figure out formats to strip useless data, see games not crash under what it thinks are errors (still remember playing a version of half life 2 where I had to walk along facing a wall late in the game to avoid a skeleton asset that was not present from being loaded for that one scene and thus prevent a crash) that will make any ROM hacker give the nice work head nod. Most do not but it is an option. For the DS it is also what gave me a very early grounding in sound hacking (electrokplankton and its wave files you could easily replace with your own samples, and the goldeneye sound file we used as the smallest known replacement also wondered how I could make it silent -- playing castlevania and hearing goldeneye gunshots was an odd experience) but that might be getting a bit off topic, own choice of music in a game is a pretty nice perk though (especially if you fancy playing some EA and such games and don't want to suffer whatever the rights management lawyers and audio directors thought would be hip and happening and down with the kids of the early-mid 2000s... I say probably being thrilled to have something like the Need for Speed soundtracks in a modern game even if very few of those songs are in my personal collection).
*you can take note of which parts of the disc, and thus which files, are accessed in the game. Code logging/data logging
https://fceux.com/web/help/CodeDataLogger.html being the name of the term. Play enough of the game, possibly even playing like a tester aiming to figure out what is being used (though see also the split game thing above as you might be able to do something on that front too).
Something to ponder in all this anyway.
