You could say iyi and it wouldn't be wrong, but güzel is a more normal way to say this kind of thing. Güzel is a very all-purpose compliment: to say that food is tasty, a place is beautiful, a girl is pretty, the weather is fine, etc... It's just the general word that comes to mind for all things like that.
No, It is not the same meaning, It literally means " The food (which is) in turkey is nice..
mesela; The restaurant that is in Istanbul is better = Istanbul'deki restoran daha iyi/guzel
so you went to a specific restaurant in Istanbul and you liked it, not all the restaurants are good but it is one specific restaurant that you liked.
back to the main sentence; Those specific dishes you ate in Turkey were so nice, so you be like "The food (that is) in turkey is very nice.
p.s; you can always omit (that/which is) in English and people would understand you though, But in Turkce, you can't do that cause it will give you a different meaning.
I hope that answer your question.