Can I build a single house in the open countryside?

A lot hangs on the word isolated

The framework says development comprising isolated homes, meaning those lying outside settlements or groups of houses, should not be approved other than under this policy. It removes the site from the list of routes available outside settlements altogether.

So the difference between isolated and merely rural is enormous. A few houses nearby is generally enough to mean you are not isolated, which reopens the ordinary routes, including infilling within a group of houses.

One or more, not all

The policy requires one or more of the five circumstances to apply. They are alternatives, so you do not need to satisfy them cumulatively. In practice most sites fit none of them.

The design route, realistically

The exceptional quality route requires the design to be truly outstanding, reflecting the highest standards in architecture, to help raise standards of design more generally in rural areas, and to significantly enhance its immediate setting while being sensitive to local character.

It is the only route in the housing policies that turns on architecture rather than location, and in practice it is attempted far more often than it is achieved. Exceptional means by national standards, not simply well designed.