One of the key insights for unikernels in general is that everything is virtualized now to begin with. The entire public cloud: AWS, GCP, Azure, etc. is virtualization with an api on top of it.

So unikernels take advantage of this fact to get the performance, security and ease of use benefits.

Hypervisors most definitely have better hardware-based isolation than a few processes running in linux. In fact the isolation is so good that the entire public clouds are built on this model.