The problem with aluminum in the 60s & 70s was with #14 & #12 branch circuit wiring not larger feeder sizes. Alum. is used on commercial jobs all the time without problems as long as the correct installation procedures are followed like using Noalox anti-oxidizing paste, using wire stripper, keeping min. bending radius when pulling and correct tightening of lugs (required torque), etc. I used to spec. on projects that aluminum could only be used on 200 amp conductors and larger. Not sure what the NEC allows for min. alum. sizes.
For 100 amp feeder, you should be able to get that in 1" conduit which can make it much easier to connect to a box or enclosure. If you need larger than 1" conduit, you might price out 2" DBII thinwall conduit for use underground. It may be cheaper but you'd probably need a pull box or two at either end to reduce to smaller conduit before going into a panel and you may need to bed it in a sand layer.
If you have larger motor loads in the shop, you may want to think about increasing the wire size another gauge or two to reduce voltage drop on startup. Motors momentarily draw 6 times their FLA and excessive voltage drop can be hard on some motors and cause annoying lighting flicker.
I would not hesitate to use alum., either indoors or below grade. The usual rule of thumb is that it needs to be one wire gauge heavier as compared to copper (refer to NEC for exact requirement). With fatter wire, it will often force you into a larger dia. conduit (NEC "conduit fill") and that should be factored into a price comparison. Fatter wire can be harder to pull through conduit but for the size and distance in question, probably not an issue. Keep conduit bends to a min. (max. 4 between pulling points) and use lube when pulling.
For someone to nick the insulation badly enough to allow water to contact the conductors, they'd have to be pretty negligent. I've never heard of this happening. Insulation is pretty tough stuff.
I installed parallel 200 amp rated aluminum conductors in 2" DBII conduit with about 200' overall length in the last house I built. I built a custom sized concrete pullbox outside the house to allow for pulling upwards vertically. Used lots of lube and pulled hard with a friend's help and no problem. (When with a parallel feeder to reduce voltage drop.) 100 amp wire at 50 - 75' would be easy peasy. If you can find a cable like teck or similar for a good price and it can be direct buried, that would simply things.