You can jailbreak the phone and install Python. There are some sample applications in Cydia for it (it's called iPhone/Python. Search for Python in cydia).
Then you will have a "native" app, not a web application and you can use the entire iPhone UI library (the part of it that is accessible via py-objc anyway) and you don't need to run a web server in the background.
You can do your development on the phone itself via SSH or you can use an iPod Touch for it. Packaging is also easy (should you need it), just create your own Cydia repository and host your package(s) in there.
Look at iPhone applications in Python for more information.