Just a quick blog on this…
You cannot create an Azure Mobile Service. You enter a unique name when creating the Mobile Service but get an error: “this name is already in use” and a red exclamation mark.
Mobile Services are deprecated, that is why you cannot create one. Please see this article: https://azure.microsoft.com/en-us/blog/transition-of-azure-mobile-services/
You must create a Mobile App instead in https://portal.azure.com. Here is a quick start for you to follow: https://azure.microsoft.com/en-us/documentation/learning-paths/appservice-mobileapps/
No the error is not intuitive and we are getting that fixed!