Use a directory to simulate a USB storage device? Or any other way to simulate a USB storage device?

When it comes to CD's you have virtual CD software in which you load an .iso and it works like a CD-Rom. But when it comes to USB is there something similar?

Is it possible to use a directory to simulate a USB storage device?

Like mounting/unmounting that directory to simulate a plug/unplug of a USB storage device?

Purpose: to read(using an application) music or video files from a USB. The application reacts only when a USB is inserted/removed.

Or any other way could help. But files seem to be the linux way. Or if there are no tools yet for this: how feasible it would be to write one?