Does Mac have something similar to a Linux loop device (alternative to losetup)?

You can use hdiutil for that. Basically, it does the same as losetup on Linux.

If you are planning to work with images with non-standard layouts or filesystems (for example, live CDs), make sure to pass -nomount to hdiutil attach, as otherwise it will complain that it couldn’t mount it (it tries to mount everything by default).

After the image is attached, it will appear in diskutil list as an ordinary disk. You can work with it just like with a physical disc.

Here is an example of mounting a live CD:

$ hdiutil attach -nomount path/to/file.iso
/dev/disk2              FDisk_partition_scheme
/dev/disk2s2            0xEF

It prints the name of the new disk. Now we can see it:

$ diskutil list

<...>

/dev/disk2 (disk image):
   #:                       TYPE NAME                    SIZE       IDENTIFIER
   0:     FDisk_partition_scheme                        +453.0 MB   disk2
   1:                       0xEF                         12.6 MB    disk2s2

This is a live CD, it uses ISO 9660 file system. You can’t mount it using diskutil, you have to use a special tool:

$ mount_cd9660 /dev/disk2 ~/tmp/mnt

When you are done, unmount and detach:

$ umount /dev/disk2
$ hdiutil detach disk2
"disk2" unmounted.
"disk2" ejected.

Mac OS X has the Disk Images Framework for live mounting disk images. Although it primarily works with its own native formats such as .dmg, I believe it can also work with .iso's and other formats. You can use Disk Utility or the hdiutil command to mount disk images.