If you thinking to start a new project with WCF, better to go with WCF Service Library. Because :
  •  As its does not have .svc file. so, it can not be hosted directly. 
  • You can use it as Plug N Play kind of thing by attaching with any hosted Project(can be with any web site / windows services ).
  • You can host it in IIS as well as other like Self-Hosting, Windows Service easily, that's why you can consume from anywhere i.e. form Console Application as well as from any Web Application.
But in case of WCF ServiceApplication :
  • It can be hosted independently because itself is a direct web service application relying on WCF technology.
  • You can not use it as Plug N Play.

So, My suggestion is to Go with WCF Service Library always if you want to customized as per requirement further. Otherwise you can go with WCF ServiceApplication for straight forward approach.

@ASR-20150831

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