Codeine's fine if you dose it correctly (same for all opiates) - they won't kill you on their own, but they are highly addictive. Just for reference, codeine belongs to the same family of drugs as opium, heroin, diamorphine, desomorphine, methadone and oxycodone to name a few. Collectively they are known as the opioids. A smaller subset of this group, the opiates, are those compounds found naturally in the opium poppy. These include codeine and morphine.

The damage comes from the impurity of the drugs. Opioid overdose in itself is dangerous, causing respiratory depression and organ failure in a similar manner to an alcohol overdose. This, however, is not the main danger of krokodil or most other drugs of this class.

Heroin has been cut with who-knows-what on its way from the poppy fields to your arm, and it may be anything from 10% to 90% pure. You just don't know how much morphine you're getting from a given dose until you take it, or what else is in there. The unpredictable strength of the drug leads to some overdose deaths, while the impurities cause toxicity and dirty needles spread infection.

Krokodil is brewed up from codeine and, as you say, various other ingredients to produce desomorphine. The process is extremely crude and creates an impure mixture containing other compounds including, as you say, some of the iodine and phosphorus used to make the desomorphine.

Iodine and phosphorus are NOT something you ever want to inject into your bloodstream. Both are toxic in their elemental forms, with iodine also forming an acid when dissolved in water (blood). Dilute iodine solution is safe to wash skin with, because your skin is fairly impermeable and the iodine concentration is low. When you inject it right into your body you're playing a whole different ball game - same with phosphorus, but personally I wouldn't want to touch that stuff at all.

Krokodil's some nasty shit, and if there was any sense in the world the Russian government would provide clean, pure morphine to those addicted to it. Morphine is cheap, and since the addicts cannot stop they might as well be given a source of it which won't kill them, administered by a nurse who can look after them. The Swiss tried this idea back in the early 90s, and heroin deaths and HIV infection caused by shared needles dropped off to basically zero within a couple of years.

So in answer to your question, yes, the pure form will do less damage. The pure form (as administered in hospitals and as prescription medication) will do you no damage at all in fact, though you will still become addicted to it with regular use.

Source: I'm an undergraduate chemist.