I think that's only possible on a jailbreaked phone, isn't it?
But my impression is that it becomes very hard to jailbreak the recent IOS
releases, so I take it for granted that app data files can't be accessed by others in iOS.
I've not been following this subject, but likely your opponent will be slow to install new iOS versions!
This is one reason for keeping your app's required iOS version recent - but that harms genuine users with old devices.
Another question. If what you said is true, is it a common practice to encrypt app data files?
I don't know how common it is. I do encrypt some data files for which I pay a royalty to a third party; I do that because I imagine standing up in court when they sue me for not looking after their valuable data, and having to tell the judge that I could have encrypted it but didn't.
There are two standard problems with that - what do you do with the keys, and how do you prevent the user from capturing the data when your app presents it to them (especially if it's e.g. video).
There are actually two slightly different problems, one for data files built in to the app and the other for data files that the app downloads from your servers when it runs.
Embedding a fixed decryption key in the executable has some chance of working.