It won't necessarily have to be read-only unless you want a persistent image, you can write read and write to the CF like a normal disk, but it will be slower and you will have to configure the bootloader to write to the CF and select the CF as the primary in bios every time you wish to boot.

With that being the case you will want to review the steps on https://help.ubuntu.com/community/LiveCDCustomization , that will direct you to create a persistent image, however I do not know if it will boot like a live CD or a mounted disk, so the boot process may take some testing.