How can we simulate Windows operations (like extracting Compressed (zipped) folder, dragging an dropping files from Windows drive to Web Applications?

You can define Sikuli locators to interact with Windows objects as explained in the article below:

https://subject7.zendesk.com/hc/en-us/articles/360022759494-How-to-Automate-a-Desktop-client-server-test-case-

Most used commands:

1. Desktop_Click
2. Desktop_Right_Click
3. Desktop_Double_Click
4. Desktop_Fill

Just to confirm regarding "dragging and dropping files", do you need to upload files from a Windows directory to a web page? Is there a "Browse" or "Choose File" button on the web page you are working on?

Yes, I need to drag and drop files from the windows explorer to the web page. There is no Browse/ Choose File button on the web page.