The band doesn't have to be ampless, no. You close mic what you want to hear and do a mix of those feeds. If you want to hear the audience, put a condenser mic or two their way.
The key point is that decent IEMs have in the region of -27dB (ish) attenuation (so think putting your fingers deep into your ears). Then the feed that you put into your IEM is fairly quiet (and safe on your ears) because you haven't got to blast the volume to get over the ambient noise that would be otherwise leaking in to your ear lugs, through the IEM from the outside world. This is why it is important to get an IEM that offers a good level of attenuation on it's own - before you even start putting music through them.
In reality, you don't need that much to make IEMs work. A small XR mixer with a couple of drum mics, a mic in front of each guitar cab, DI off the bass... and an XLR split off the vocal mics and you are there... Or alternatively, if you don't mind the stage mix you are getting, the Zoom field recorder approach can do you well also. It all depends on how much control you want over your mix.