PAAS versus SAAS db

azure managed sql instance versus azure sql db

Managed instance is azure spinning up a private SQL cluster for you on vm’s and maintaining it.
Azure SQL is just getting the db and some ram,CPU and I/o.
Azure SQL can handle some solid workloads but managed gives you a bit more control over performance.

if the app can be resource intensive I would do a test before choosing azure SQL to see if the performance in their tiers suits you.
When going in the higher tiers, managed instance sometimes is actually cheaper and more performant than azure SQL in my experience.

someapps cannot be installed on Azure SQL Db as that is incompatible with it
so you are limited to managed instance (expensive) or sql server in a vm (cheaper but you gotta take care of your own server patching/security etc).