Yes, We can directly host any site from the physical location of directory itself.
Right Click on Physical Folder > Properties > Web Sharing
There you need to select > "Share This Folder" Option Button. Then it will ask for alias name and other setting. Then Click on OK.
To Validate : Run > Inetmgr > Check there should an virtual directory with the same "Alias" name that you have given.
If there are already one Virtual directory exist it will showing you the error message while you providing the "Alias" name.