Uploading Storyline 2 Course onto Confluence

"So you don't attach the published files to an individual Confluence page, or use some other add-on--you upload the published content directly to the server?"

That would be yes.

"<iframe src="demo_iframe.htm" name="iframe_a"></iframe>"

You just put normal URL. AFAIK iframe won't understand normal server path. You can of course put the files on server where does your confluence reside, then URL would be something like "https://www.yourdomain.com/confluence/course1/story_html5.html". It should also eliminate problem with security issues, as you run iframe from the domain you have your confluence on. If you have some cloud-based confluence, you can put it on any server and then just give link.

I strongly advise using html5 output, as the course published this way is simply very complex www site. Which you can view through iframe. Of course flash also can be viewed through iframe, just use story.html if you have flash-published course.

You can see how I used iframe basically on my website as part of my company portfolio:
https://www.inquest.pl/realizacje/platforma-lms-scorm-mazda/