SSMS Error when creating database "Method not found .. StringCollection"
You have several options:

Make sure SSMS 2016 has the latest fixes for that version. Many people forget that tools need patching as well as server components. See Latest Builds of Management Studio for more information.

Consider updating SSMS to the latest major version, which is 17.2 at the time of writing. From that link:

This version of SSMS works with all supported versions of SQL Server 2008 - SQL Server 2017 and provides the greatest level of support for working with the latest cloud features in Azure SQL Database and Azure SQL Data Warehouse.


Perform an uninstall and reinstall. You could reinstall the same version if you like.