Hey, few artifacts that we have gathered for your question here:
For Azure Blob Storage, it isn't hierarchical beyond the containers, the files that can be added in them have "/" or "\" characters, these are explained as a folder by the applications which can read the blob storage.
Looking for Azure storage material from basics! Refer to this video on Azure storage provided by Intellipaat:
Next point to not is that Azure blob cannot be mounted as a native share on a virtual machine.
Now for Azure File Service, it provides Azure blob storage with an interface of SMB Protocol which solves the above problem of mounting as a native share on VM's. You can easily leverage a native Azure API straight into the Blob Storage if you are developing a new application.
You can use Azure File Service for an application using porting for file sharing.
However, Blob storage is far cheaper than File Storage.
A major advantage of File Storage is that: If you want to migrate to a different platform with Azure Blob Storage, then you may have to change the code for your application but in case of File storage, you can easily migrate your application to any other platform supporting SMB.
Hope it gives you enough limelight over this.