Just about every adjective can be nominalized in German, in three variations, one for each genus. In a way, these are just abbreviations:
- der schöne/große/blonde/... Mann => der Schöne/Große/Blonde/... [Mann]
- die schöne/große/blonde/... Frau => die Schöne/Große/Blonde/... [Frau]
- das schöne/große/blonde/... Ding => das Schöne/Große/Blonde/... [Ding]
Not all of them might be used frequently (e.g. instead of "die Blonde", you may also often hear "die Blondine"), and some might adopt a more specific/ less literal meaning ("das Blonde" refers to a type of beer).
Accordingly, "manches Schöne" stands for "manches schöne Ding". "Ding" is used in the most general sense here, i.e. not just "object", but also "event".
I'd translate the line as
I had imagined many a beautiful thing
(which sounds weird because English can't do the same)