I decided to create the view in PP from SOARS using a linked server, which will slow the read options. Can I implement an external table using a polybase(Getexternal) data?
Which version of SQL Server are you on? On SQL 2019, you can set up the table as an external table rather than using a linked server. This has some advantages, not the least with regards to security. However, external tables are read-only, so if you need to update the remote table, the linked server is a better alternative.
When it comes to speed, there is on reason to hope that the external table is faster. But since a lot depends on the query plan, and you could get a different plan with the external table, you could see major differences - in either direction. But generally, I think the overhead for Polybase is higher, since there are more services involved. This matters particularly, if you are running many short queries.
2) Move the Payroll and the PP databases in one instance so that If I create a view employee in PP for the Payroll table employee, it will also allow me to read and write.
That is definitely a better option. You gain both in manageability and in speed. And what you lose? I don't know, but maybe there was a reason you set up two instances originally.
3) If Azure or AWS support built-in functionality to share tables across two databases, that is also fine.
I don't know about AWS, but on Azure SQL Databases, you can set up external tables, but this is different from Polybase. I don't know if they are read-write, but I believe they are a more realistic option than external tables in Polybase.