Although I'm not a copyright laywer, I did previously work for an intellectual property services company. The country codes collection is a service they provide designed to make it easy to keep country codes up to date. This doesn't negate the "free-of-charge use" of the database. ISO appear to have clarified this almost 20 years ago: http://xml.coverpages.org/ISOReaffirms.html , and it looks like the situation hasn't changed.
I don't see how your rights would be limited by including it in your app. You can just say the copyright to the ISO database belongs to ISO, but is free-of-charge, and the copyright to the code written by you belongs to you, which is not free of charge, or any license you wish.
Edit: Because I can't reply - CC0, a public domain - like license was released in 2009, well after the clarification of their "free-of-charge use" license.
It would be much better if they simply dedicated this database to the public domain.
In the "clarification" they indeed seem to consider that the database is covered by their copyright, and any free use is subject to their continued benevolence:
> However, ISO and its members do not charge for the use made of the codes contained in these standards, subject to this being consistent with ISO's copyright.
We're way off in speculation land here, but if CH law is like DE law, IIRC it's one of the countries that releasing to the public domain isn't really possible (which is why CC0 exists)
I don't see how your rights would be limited by including it in your app. You can just say the copyright to the ISO database belongs to ISO, but is free-of-charge, and the copyright to the code written by you belongs to you, which is not free of charge, or any license you wish.
Edit: Because I can't reply - CC0, a public domain - like license was released in 2009, well after the clarification of their "free-of-charge use" license.