Is Iaido a more traditional form of martial arts than Kendo? And what applications does it have in real life?

Iaido is the modern form of Iaijutsu, while Kendo is the modern form of Kenjutsu. Both are extremely traditional, but neither are ancient martial arts. If I had to choose I'd say Iaido has more elements of ancient Japan and could be called "more traditional" but both are descendants of the old styles.

Kendo is focused on 1v1 fights, similar to boxing or fencing. It suits someone who enjoys sports, but likes studying historical swords and Japanese culture. Some dojos have their quirks, but in general they all teach the same techniques in order to compete. Kendo is a big deal in Japan, close to the popularity of Football in America.

Iaido on the other hand is focused entirely on the mechanics of using a sword. It's not very strenuous, but develops and requires extreme mental focus. A person's skill in Iaido is measured entirely on how well he can perform the techniques, as opposed to his success in competitions. It also focuses on techniques executed from a sitting position, which was vital for self-defense in feudal Japan, but now is only maintained for historical reasons.

Not all styles of Iaido are the same, with some more focused on sitting quick-draw, others on standing cuts. There's even a school taught to Kendo players to improve their blade control and teach them about using real sharp swords, instead of the blunt swords they train with.

As for real life applications, it has none. Both sword arts focus entirely on using swords. You can indeed use a stick with Kendo techniques, but you'd be better off running. Criminals don't hit with sticks, they ambush you with a dozen friends. Iaido focuses on the cut, and probably wouldn't work without an edged weapon.

What you will develop is agility, how to focus while stressed and how to perform difficult movements while stressed. Some people find Iaido works just like meditating to clear their minds. Kendo also really improves your stamina and lung capacity. Even so, you should join the art to learn about sword use. A gym serves much better for fitness.

Well let's see how Unpopular Puffin I can get with this...

I think skill wise you are much better off with kendo in modern application of techniques. This is because iaido seems to be mainly a style based upon the draw and the follow up attacks from there. As any gunman(or any modern weapons expert) can tell you drawing the weapon is essential skill and just that skill alone can increase your chances of survival to a great degree. And with that in mind you can see iaido being an essential and very necessary skill for a peacetime samurai who wore a sword sheathed at all times. For modern applications however the "sword" would be a sword like pole that you can grab and, being that you have picked it up, it does not require drawing. So the following combat would more resemble kendo really.

With that said neither one is very applicable technique wise in modern self defense when compared to many other arts. The reason is that the likely hood of you being next to a sword like pole when randomly attacked, and then you having the innate ability(since people don't train this ability) to find this pole in the middle of defending from or getting beat by a barrage of attacks is so very unlikely that it's very unlikely you'll be able to use the sword techniques. Only way to really make it usable is if you had sword like item on your person at all times, but it's like to be illegal to carry such items or you'll be that very odd healthy person with a cane.(There's really only one reason why a healthy person would have a cane.)

(Btw, as a heads up if you are thinking you can wield a knife with sword skills, I found it to be very different. The biggest difference is in that with sword you have the ability to parry, but with a knife not so much.)

With that said I think kendo and iaido aims to develop itself to be something higher than being merely a martial skill. I think with iaido there is an element of zen, tradition, and just pure historical knowledge. If I was to go into iaido it would be for those reasons, but not for martial reasons.

It would not be fair to say that either is "more traditional" than the other. how would you even decide that? both can be applied to some degree in todays world. The ability to know how to deflect a sword attack translates to being able to use a broom, walking cane, or other straight object to deflect a stick attack. Concentration and self control..... Well, many things can help with that. you don't need to do something as exotic as these to find something that will help with that. Developing those is as much a matter of the persons attitude and goals as it is what they are doing.

...

That might be obstructive because a lot of people cant find masters for that anymore unless its out of the united states but if you do kendo there are alot of kendo schools and similar minded kendo schools within the society.