First, yes, Iceland would be easy to occupy. In fact, it's already happened once - the UK occupied it during WWII (https://en.wikipedia.org/wiki/Invasion_of_Iceland).

But holding it would be a problem, for anyone except the US or the UK. Let's say China occupied Iceland. How are they going to send supplies to their troops there? Well, by air or by ocean. That's going to be... problematic. It's going to be much more problematic if NATO lives up to its charter and defends its' member Iceland.