When you create a USB boot drive or DVD boot disk from an iso file, you get a live operating system that uses the 'built-in' linux kernel that comes from the iso file. It is not possible to make such a system boot with another kernel.
You may think of a persistent live system. It is possible to install and use various application program packages, but the kernel is started before the system for persistence is activated, so it is not possible to make it use a kernel that is installed afterwards.
The only alternative is to download (or create) a new iso file with the kernel, that you want to use, and to create a USB boot drive or DVD boot disk.
The 16.04 LTS point release iso files come with the following kernels
- 16.04.1 LTS -- linux kernel 4.4
- 16.04.2 LTS -- linux kernel 4.8
- 16.04.3 LTS -- linux kernel 4.10
See this link,
https://www.ubuntu.com/info/release-end-of-life
and scroll down to the paragraph 'Kernel release end of life'. See also the following links concerning the kernels and upgrading the LTS hardware enablement stack, HWE,
Can I smoothly upgrade from one LTS to next LTS release?
wiki.ubuntu.com/Kernel/RollingLTSEnablementStack
Please notice the difference between a live operating system (live-only or persistent live) and an installed system. Installed systems can be updated & upgraded completely (including the linux kernel, hardware drivers, also proprietary drivers).
It is possible to install standard Ubuntu or an Ubuntu community flavour (Kubuntu, Lubuntu, ... Xubuntu) into an external drive (installed like into an internal drive). See this link,
Boot Ubuntu from external drive.