Your system has a UEFI firmware. Because of this, Windows requires you to format your hard drive as a GPT disk instead of an MBR disk (which you have). GPT disks do not have the concept of an "Active" partition the way MBR disks do. That's why the option is grayed out.
In a BIOS world with MBR disks, the computer simply boots to whatever partition has the Active flag on it. In a UEFI world, it's not so simple. To boot an operating system from another partition, you must add a boot entry for it in your EFI partition, and possibly your firmware setup. EasyUEFI looks to be a good tool for doing that, but I've never used it before so I can't vouch for its effectiveness. I have used EasyBCD before, but that tool is not relevant to what you're trying to accomplish.
This brings me to the second point I wanted to make. Even if you manage to get a boot entry for the second partition to appear, you cannot simply drop an ISO file onto a hard drive partition and boot from it. In order to install an operating system, you must have some kind of boot media to install from, whether that be a CD/DVD, external hard drive, or USB flash drive. It's not impossible to install Linux without those things, but it's not a standard way of doing things and there are few tools that can accommodate it (WUBI is a notable example of such a tool).