I am not entirely sure what you are asking for.
1) If emulation is your think then yeah MAME cabinets have been a thing for years and years and years. I am not sure where we are suggesting for buttons these days but you can readily buy arcade buttons, roller balls and sticks for use in such projects. Light gun stuff gets a bit more tricky and while people have adapted exercise bikes or built their own cockpits for things with actuators and the like to make it into more of a simulator I will leave that aspect for now. If you are messing with CRT screens and removing them from cases then be careful -- they often have thousands of volts going through parts. The woodworking aspects are not usually so bad and with the modern takes on plastic dip coatings you can probably have a very nice custom design without paying a plastics shop a lot of money.
2) If you want to put a real device (plus associated mods) in a cabinet then yeah it is a custom shell, with controls usually being handled by either an adapter (plenty of things exist to adapt modern controllers, which might have more buttons or functionality, for use on retro devices) for something or cannibalising a controller (all the same things that people do to either convert things to PC via soldering or add macros and turbo buttons or remaps in hardware do for this as well) which is to say you either solder onto the debug points, solder onto the wires in the case of simple buttons or cut into traces and solder onto those..
3) If you have original arcade hardware, or like the idea, and want to spice that up a bit then jamma board is the search term you want to start the descent into madness.
combo of 2 and 3 can also exist if the console was a piece of cut down arcade hardware, or the arcade board a jazzed up version of the console of the day but that is getting way into the weeds.