Without a developer account with iOS, you can't make secured certificates. Therefore, they simply won't allow you to install anything on your iPhone. Without that developer account, you're forced to use the iOS simulator, which doesn't require those secure certificates. This means you'll have to use a local mac with the iOS simulator before you can test your app, even if you have the hosted mac builder.
The hosted mac builder is particularly useful if you have a developer account and want to send your app straight to your phone without having to use an actual Mac. You can in theory use the hosted mac builder to send your app to the iOS simulator but that kind of defeats the purpose of having the local mac.
If this makes sense, it'd be nice to make it a part of the sticky post because I had troubles figuring out the differences too. Trial and error is what got me this far haha.