Upgrade from Visual Studio 2010 to Visual Studio 2015 - Virtual directory issues

I am using Visual Studio 2015, update 3 professional Edition and upgrading a VS 2010 project to VS 2015. The published project in VS 2015 works fine, but issues running locally. When I run the project locally, I get-

   HTTP Error 500.19 - Internal Server Error
    The requested page cannot be accessed because the related configuration data for the page is invalid.

    Detailed Error Information:
    Module         IIS Web Core
    Notification       BeginRequest
    Handler    Not yet determined
    Error Code     0x80070021
    Config Error       Configuration section not allowed to be set below application
    Config File    \\?\C:\My Directory\web.config

    Config Source:

      104:  <system.webServer>
      105:      <modules runAllManagedModulesForAllRequests="true"/>
      106:     <validation validateIntegratedModeConfiguration="false"/>

(I dont see that in the web.config file. Not sure where it is coming from) I used dev tools in Chrome and it gave a number of 404 errors for bunch of js files. It seems to be issue with Virtual directories. So I googled, and according to solution given: Visual Studio 2015 - Adding virtual directory not possible

I applied 2nd solution modifying the Applicationhost.config file to to the localhost value specified in the project properties under project Url:

<bindings>
    <binding protocol="http" bindingInformation="*:51005:localhost" />
</bindings>

Now using dev tools, I dont see 404 errors for JS files, rather just one error:

Failed to load resource: the server responded with a status of 500 (Internal Server Error) Default.aspx

Please guide how to resolve it!