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Thanks! Besides the settings in C# project and IIS, I also need to change license initialization codes as follows:
ESRI.ArcGIS.RuntimeManager.Bind(ESRI.ArcGIS.ProductCode.EngineOrDesktop);
IAoInitialize m_AOInit = new AoInitializeClass();
esriLicenseStatus licenseStatus = m_AOInit.Initialize(esriLicenseProductCode.esriLicenseProductCodeArcServer);
Then the whole thing begins to work!