Best Azure Service for Large no of SQLServer Databases
My Question is that in the Long Run and from management and scalability point of view which option is better


For "management and scalability" Azure SQL Database is clearly better.

Azure SQL Database was designed for this scenario.  You can spread out your databases across multiple pools, as needed, or move specific databases to non-pooled DTUs.  And Azure SQL Database has built-in patching, HA/DR, monitoring, and backup.  

Azure Virtual Machines give you way more flexibility to design SQL Servers that exactly fit your needs, but that comes with a cost of complexity and management.

In both cases you should plan to spread your databases out over a few Elastic Pools / VMs, so you can scale out as well as up.