It's like rustup or nvm (node version manager) for Swift. Swiftly installs Swift. If all you needed Xcode for was to install Swift then yes, you can replace Xcode with swiftly.
I have an Intel-based MacBook Pro that doesn’t update beyond macOS 13, and it runs neither Xcode 16 nor Swift 6. Presumably, one might be able to build Swift 6 from source. My workaround is containers.
...in a way supported by Apple. But OpenCore [0] makes installing the latest OS on older Macs relatively simple. You lose out on some features that your hardware doesn't support (e.g. Apple Intelligence), but most of that is unnecessary at best.