First off, are you saying Jesus was ugly? Second, as to your question, the text says that "he" was marred in his appearance (as in 52:14). Other nations were shocked how hoe much the nation was reduced and decimated, and no one desired that the people be near them -- you of course recall how the Jews have been rejected from many countries throughout history.
The word "Israel" refers to the physical country because that is the land of the nation of Israel. So Israel is the promised land (renamed from K'na'an) and also the nation which is spoken of often in the singular as a man. And, historically, this man of Israel has been rejected and forced to suffer.
That's one translation. The text reads וּכְמַסְתֵּ֤ר פָּנִים֙ מִמֶּ֔נּוּ which is, by some, rendered "and like one who hides his face from us". As the text is being put in the mouths of other nations, it is the nation of Israel who is seen hiding his face because of his shame. Either way, Israel's abject state, after invasion and exile, is certainly worth hiding, or hiding from. If I'm reading the targum right, it seems to say that it was the nation from whom God his His face.
Israel didn't claim it. The other nations recognized that Israel was suffering for the other nations' sins. They also recognized that Israel was suffering at their (the nations' hands), that is, "bore our suffering". Here is one write up of it
"Indeed, he bore our illnesses: Heb. אָכֵן, an expression of ‘but’ in all places. But now we see that this came to him not because of his low state, but that he was chastised with pains so that all the nations be atoned for with Israel’s suffering. The illness that should rightfully have come upon us, he bore.
yet we accounted him: We thought that he was hated by the Omnipresent, but he was not so, but he was pained because of our transgressions and crushed because of our iniquities."
First, that's a strange translation. The words for "transgressions" and "iniquities" are prefaced by the mem which means "from" or "because of" not really "for." The nations committed sins which led to the suffering of Israel. Nothing new there. In fact, the idea of "of", if it is correct, would only reflect the way the gentiles understand the relationship, not necessarily the truth of the situation. Next, there is an idea that Israel is responsible for the well being of the world. That's part of Israel's role, to atone for the nations and protect them. Here's an interesting talmudic quote (Sukkah, 55b)
"
Rabbi Yoḥanan said: Woe unto the nations of the world
that lost something
and do not know what they lost. When the Temple is standing, the seventy bulls sacrificed on the
altar during the festival of
Sukkot atones for them. And now that the Temple is destroyed,
who atones for them?"
with the destruction of the first temple, and later, the second, the world did not get the atonement through the sacrifices. So the nations say either that they admit to having caused Israel to suffer, or that the way they figure it, Israel is being punished as atonement for them.
Isaiah 53 How does Israel's suffering atone for the sins of the nations?
Isaiah 53: The Suffering Servant