You don't have to if you use mDNS. Or configure the iPhone to use your own self-hosted DNS server which can just be your router/gateway pointed to 9.9.9.9 / 1.1.1.1 / 8.8.8.8 with a few custom entries. You would need to jailbreak your iPhone to edit the hosts file.

I have a real domain name for my house. I have a few publicly available services and those are listed in public DNS. For local services, I add them to my local DNS server. For ephemeral and low importance stuff (e.g. printers) mDNS works great.

For things like Home Assistant I use the following subdomain structure, so that my password manager does the right thing:

  service.myhouse.tld
  local.service.myhouse.tld

Exactly, you don't. My qualm was with the "hosts file works well enough" claim of the person I responded to.