Azure App Service is a service used to create and deploy scalable, mission-critical web apps.
You can use custom domains in Azure App Service to host multiple applications under different subdomains. To achieve the desired structure, you can create a custom domain for each environment (dev, uat, production) and then use path-based routing to route requests to the appropriate application.
For example, you can create a custom domain for dev.acme.com and then use path-based routing to route requests to dev.acme.com/website1 to the first website and dev.acme.com/website2 to the second website.
To set up path-based routing, you can use the URL Rewrite module in Azure App Service. You can find more information on how to set up URL Rewrite in Azure App Service in this article: https://docs.microsoft.com/en-us/azure/app-service/configure-url-rewrite
Regarding your question about the physical path of the application, when you deploy an application to Azure App Service, the application files are stored in a file system that is managed by Azure. You can access the file system using FTP or the Kudu console, but you cannot remote into the instance.
When you deploy an application from Visual Studio, the physical path of the application is automatically resolved. You can find more information on how to deploy an application from Visual Studio to Azure App Service in this article: https://docs.microsoft.com/en-us/azure/app-service/app-service-web-get-started-dotnet
I hope this helps! Let me know if you have any other questions.