Even if it is SVG 1.1, certain things won't work. Things like animation, scripting and a lot of options with regards to text will not work.
Yes, an image in a SVG wrapper will give better results with scaling. As an example, the code I use as a base for my covers are:
<svg xmlns="http://www.w3.org/2000/svg" height="100%" preserveAspectRatio="xMidYMid meet" version="1.1" viewBox="0 0 522 800" width="100%" xmlns:xlink="http://www.w3.org/1999/xlink">
<image height="800" width="522" xlink:href="../Images/cover.jpg"></image>
The viewbox and image resolution must be equal to the resolution of the image. The width and height are set to 100%. That means that the image is scaled to either the maximum width or height of the screen, depending on what is reached earlier. If the screen resolution is below the image resolution, the image is rescaled upwards. If the image is larger, the image is scaled down.
The aspect ratio is preserved.