The definition of an isolated system is: "A system that does not interact with its surroundings; that is, its total energy and mass stay constant."[source]
Does an isolated system mean that it does not have any non conservative forces?
No. If you imagine putting an electric circuit into a thermally insulating box, then the electric conservative forces will work just fine to make the currents flow. Isolated systems and conservative forces are two different things.
If yes, then, is mechanical energy always conserved in an isolated system? If not, what does it mean?
Mechanical energy (which would be one type of the internal energy in the system) is not necessarily conserved in an isolated system. The total energy is conserved. You could imagine some of the energy forms that we call mechanical (gravitational potential, kinetic...) being converted into e.g. thermal energy through heat inside the isolated system.
Is internal energy conserved in an isolated system?
Yes. That is half of the definition.
I looked up conservation of mechanical energy and it says that mechanical energy is conserved in an isolated system with only conservative forces.
Yes, this is correct. Conservative forces cause mechanical energy to be conserved generally (changing from potential energies to kinetic energies and opposite). Non-conservative forces are those that cause e.g. heat or so. They convert mechanical energy into something else, such as thermal.
If a system only contains conservative forces, so that it only can convert energy from one mechanical to another mechanical form, and if no energy is added or removed (isolated system), then it follows that the mechanical energy cannot change.