How do I add an audio book to my iPhone?
I think your issue is your file type, audiobooks are usually MP3 files. MP3 files can only be used for audio, whereas MP4 files can store audio, video, still images, subtitles, and text. In technical terms, MP3 is an “audio coding” format while MP4 is a “digital multimedia container” format.

After changing file format, try importing into iTunes again and syncing the files to your iPhone via USB.