Here is the actual problem with dpkg on your VM, that blocks Scalarizr upgrade:
Configuration file '/etc/cloud/cloud.cfg'
==> Modified (by you or by a script) since installation.
==> Package distributor has shipped an updated version.
What would you like to do about it ? Your options are:
Y or I : install the package maintainer's version
N or O : keep your currently-installed version
D : show the differences between the versions
Z : start a shell to examine the situation
The default action is to keep your current version.
*** cloud.cfg (Y/I/N/O/D/Z) [default=N] ? dpkg: error processing package cloud-init (--configure):
end of file on stdin at conffile prompt
Errors were encountered while processing:
You should run dpkg --reconfigure and manually resolve cloud-init upgrade. Scalarizr Update Server will allow future upgrades to newer versions. For 6.3.6 you'll continue to see this error.