Not only that but James is rendered in Welsh as Iago, like in Santiago.

Yes, but Hebrew has no /dZ/ j-sound either. James is one of the English forms of ya’akobh. You can see all kinds of transformation of the name throughout European languages: Italian Giacomo, Spanish Diego (from Santiago, i.e., Saint James), Jaime, French Jacques. The thing about "Welsh" surnames is that the Wlesh didn't tradtionally have surnames, like many peoples throughout the world, but worked with a system of patronymics. Many folks were forced by government decree to adopt family names sometime in the late 18th century / early 19th century. Cf. Jews in the Russian Empire. Most of the names ending in -baum and -stein date from that era. One of my favorite onomastic prefixes is Ffitz from Anglo-Norman fils 'son'. The double eff is /f/ in Welsh whereas single eff is /v/.