So sure... 16 inch guns makes more boom - and damage - but as for actual penetration it ain't that miraculous. And neither are Iowa's or other warships' armors.
It's the classic case. During the Anzio landings a company of German tanks, including a few Tigers, actually made it as far as the beach, at which point they were engaged by direct fire from a US destroyer. At least two Tigers were hit directly by 5"/38 HC shells. Armor was penetrated for neither of them by the hits, but they were nevertheless knocked out. Concussion from the shellhits turned the tank interiors to dust and killed the crews. In another case for the same action, but further away, a Panzer II was actually flipped over backwards when an 8"/55 HC shell detonated a couple of feet in front of it. A naval shell is not the same as a land artillery shell. They tend to be much bigger and heavier, and fired with much larger propellant charges from much longer barrels.
A parallel more recent in time comes from the First Gulf War, in which on the opening day Kuwaiti Navy patrol boats standing close to shore engaged, and killed, Iraqi T-55s and T-72s with their 76mm/62 OTO/Melara Compact guns. 76mm is no longer considered decent ante for a tank gun, you need at
least a 105mm to compete and a 120mm to be a serious contender, and on the surface of it the statement that even a T-55 was killed by 76mm fire is ludicrious. But these were naval guns, firing naval shells.
Also, there is a significant point you missed.
Iowa's armor scheme was not the best, pound for pound, that ever went to sea (that honor is reserved to the South Dakota-class), but it was extremely well thought-out and superior to any of her contemporaries. Most significant are two facts: the ship was in fact
built of STS steel, so in a sense it was actually
made of armor plate. Impact on practically any part of it will count as having to pierce some kind of armor. And in addition to that, there was a 1" STS plate outboard of the main armor plating intended to remove the armor-piercing cap from an incoming shell. Things like the APDS round will still likely penetrate, but shaped-charge and tandem-charge warheads will detonate well before they threaten something vital.