Is Iceland an example of a hot-spot overlying a mantle plume?
Yes, Iceland is an example of a hotspot overlying a plume. The plume has been imaged seismically, e.g., see the Science paper (Figure 3) by Montelli et al. (2004). It is available at http://www.sciencemag.org/content/303/5656/338

The 2015 paper you referred doesn't dispute that claim. All is says is that "The plume split off a sliver of continent from Greenland in the Early Eocene. This sliver is now located beneath southeast Iceland where it locally contaminates some of the plume-derived magmas".