You cannot do a union all between different sources. There is an idea in the idea forum to provide this sort of thing. Data blending provides different functionality. You are left with getting the SQL data into Excel, or vice versa, or leaving them as 2 sources.
Thanks Alex! I will think about what's the best solution.
You can create linked tables in SQL Server and/or Excel to create a federated database, then create a UNION query on that. Alternatively, you can build a scaffold data source, then use that as the primary data source in a Tableau data blend.